| Citigroup and Arjuna Capital said in a statement yesterday that Citi is taking steps to provide gender and ethnicity wage data in an effort to help closing the pay gap, making it the first U.S. bank to respond to shareholder concerns.
In response to Citi’s steps, Arjuna Capital withdrew its gender pay shareholder proposal that it had submitted to Citigroup Inc. on Nov. 13, 2017 regarding gender pay equity submitted under Rule 14a-8 for inclusion in Citigroup’s 2018 proxy statement on behalf of Hilda Toth Maibach.
“Citigroup is stepping into a leadership role on the gender pay gap that we have not seen from any of its US financial peers. This is a tipping point for the Wall Street Banks,” Natasha Lamb, managing partner at Arjuna Capital, said in a statement. “We expect women will not only receive the pay they deserve at Citi, the company will reap the benefits of talent acquisition and retention so that more women can move into leadership. Other leading banks can either follow Citi’s example on gender pay or risk further laggard status on issues of concern to women.”
Citi’s announcement represents a major shift for U.S. banks and credit card companies, since no financial services company so far targeted by shareholders for gender pay has taken such action.
Bank of America, MasterCard, American Express, JP Morgan, Wells Fargo and Citi all rejected proposals in 2017 asking for detailed reports on the percentage pay gap between male and female employees across race and ethnicity, including base, bonus and equity compensation, policies to address that gap, the methodology used and quantitative reduction targets.
To date, Citi is the first bank targeted to respond with quantitative reporting.
“At Citi, our continuing focus on pay equity furthers our goal of being the employer of choice for employees of diverse backgrounds, and it supports our efforts to attract and retain the best talent and reward performance consistent with our Leadership Standards,” the company said in a memo on its website. “These are clear business imperatives for Citi, and we remain firmly committed to them.”
Arjuna Capital, which in 2016 succeeded in getting seven tech companies to disclose their gender pay gaps, filed nine shareholder proposals for the 2018 proxy season, asking Citibank, J.P. Morgan, Wells Fargo, Bank of America, Bank of New York Mellon, AmEx, Mastercard, Reinsurance Group and Progressive Insurance to publish the companies’ policies and goals to reduce the gender pay gap.
The financial services sector has been under scrutiny for a lack of female representation in senior roles, despite a majority of female employees. In the UK, where employers are required to publish their gender pay gaps by April, banking peers have been called out for among the largest median pay gaps, 24 percent on average.
