Amazon took legal action in an attempt to avoid having to hold a shareholder vote on whether it should work to reduce the gap between how much it pays male and female staff.Lawyers for the world’s largest retailer asked the US Securities and Exchange Commission (SEC) to give it permission not to include a vote on addressing the gender pay gap at its forthcoming shareholding meeting, because a proposal brought by activist investors was “impermissibly vague and misleading”.
The SEC ruled Amazon may not omit the proposal and said it should be voted on at the company’s shareholder meeting in May.
The proposal, submitted by investment firm Arjuna Capital, requested Amazon prepare a report, by October 2016, on its “policies and goals to reduce the gender pay gap”.
In letters to the SEC, Amazon’s lawyers claimed the proposal was “so vague and indefinite as to make it impossible for either the board of directors or stockholders at large to comprehend precisely what the proposals would entail”.
Natasha Lamb, director of shareholder engagement at Arjuna Capital, said she expected some pushback from Silicon Valley companies but was shocked Amazon would try to have the proposal excluded on the grounds of being too vague.
Silicon Valley's "atrocious record"
“They argued that shareholders wouldn’t know what the gender pay gap is and might get confused,” Lamb said. “It’s pretty clear. This is a problem, particularly for technology companies. Silicon Valley has an atrocious record on diversity, the number of women in the ranks is very low.”
Lamb said it is impossible to know for sure how much less women in technology firms are paid compared with men, and the lack of transparency is a key part of the problem. She said a report by technology recruitment firm Dice found that men earned nearly $10,000 more than women on average in 2014.
“Across the country women earn 79 cents to every dollar earned by men, and at the current rate of change that gap won’t close until 2058,” Lamb said.
A spokesman for Amazon declined to state whether or not the company would include the proposal on its ballot. The spokesman also refused to answer any questions about the gender pay gap at the company.
In a statement, he said: “We’re committed to fairly and equitably compensating all our employees, and we review all employee compensation on at least an annual basis to ensure that it meets that bar.
“We also think it’s important to work on longer-term programs to increase the number of women and minorities in tech, and we partner with local and national organizations such as Code.org, the Anita Borg Institute, Ada Academy, Girls Who Code and a number of others.”
24 percent
According to Amazon’s latest estimates, 39% of its global workforce is female. At the managerial level, that falls to 24%.
In 2014 a Seattle Times editorial wondered if Amazon’s phenomenal growth was widening the gender pay gap for the city, the birthplace and headquarters of the internet giant. It reported US Census Bureau figures showing the gender pay gap had increased by $7,000, or 12%, in just one year.
AP ImagesLamb said she submitted the same proposal to nine big US technology companies, and Amazon was the only one to take legal action to avoid having to include it on their ballot papers.
Lamb said Apple’s chief executive, Tim Cook, wrote back to state that the company had 99.6% gender pay equality at base and bonus pay levels, but not if employees’ stock equity was taken into account, and he was committed to working harder on the issue.
Intel said it had 100% gender pay equality at base and bonus pay levels. Travel website Expedia said it planned to make pay equal across base salary, bonus and equity grants.
Obama rules
Earlier this year Barack Obama outlined new rules to force companies with at least 100 employees to disclose salaries broken down by gender, race and ethnicity.
The US pay gap has barely changed since 2000; in the UK it has fallen by 9%. In the US, the pay gap is 2.5% larger than the Organization for Economic Co-operation and Development (OECD) average, and 11% points behind New Zealand – the leading country in terms of pay equality.
The pay data is to be collected by the Equal Employment Opportunity Commission (EEOC), which collects data on the number of employees by sex, race and ethnicity but not how much they are paid.
EEOC data has revealed the startling lack of diversity in Silicon Valley firms, withAfrican Americans, for example, representing less than 2% of employees at Facebook and Twitter.
The EEOC hopes to finalise the new rules by September 2016, with the first reports in September 2017.