Natasha Lamb

Sexual harassment has dominated the headlines recently, but another dysfunctional aspect of corporate America gets far less publicity: the gender pay gap.

Men in the U.S., on average, get 20 cents more than women for every dollar they earn. Natasha Lamb, a portfolio manager and managing partner at Arjuna Capital, has taken on gender pay parity as her cause, using shareholder activism and negotiation to improve corporate performance. 

“I always look to have a dialogue with the corporation,” she said. “That’s how we get results.”

Lamb has been pressing firms in the consumer/retail, technology and banking sectors to reveal pay discrepancies between male and female employees. Arjuna and Proxy Impact on Tuesday released its first gender pay scorecard ranking corporations based on metrics for equal pay, median pay and racial pay gaps, coverage and commitment to making further improvements, and a series of sub-scores.

“It’s a disclosure scorecard,” Lamb noted, adding that corporations received grades of F for their lack of quantitative reporting, commitments and global coverage. Companies such as Apple, which topped the list and earned a score of A-, illustrated strong performance in disclosing 100 percent equal and racial adjusted pay equity including base, bonus and equity components, annual disclosure and 100 percent global coverage.

While Lamb didn’t know the equal pay gaps for the companies before targeting them, she said, “No industry is immune. We’re looking for quantifiable metrics. Give us the numbers and until then, we’ll take the metrics.”

 TJX Cos. Inc. and Walmart appear at the bottom of the chart, having both earned grades of F, along with Facebook, Oracle  and Goldman Sachs largely for failing to offer up data, while Apple, Nike and Starbucks, which agreed to disclose gender pay gaps, were awarded A-minuses. (Lamb doesn’t give A’s to leave room for improvement.)

Lamb said increased global scrutiny and media coverage motivated technology firms to work with Arjuna. For example, eBay investors voted 51 percent in favor of the shareholder proposal. It’s rare for shareholders to show engagement above 50 percent, she said. After shareholders of Lamb’s first target corporation voted overwhelmingly to pass the proposal, she took the proposition to nine other technology companies.

“One of the reasons we started engaging with Silicon Valley and Wall Street is that those sectors were having issues with sexual harassment and bias,” Lamb said. “They had a lack of women in leadership positions and the inability to attract women. We see them as connected. What will move the needle on sexual harassment in the workplace? Bringing [corporate] power structures into balance.

“Sexual harassment is such a huge issue,” she said. “I believe it’s a symptom and we need to address the root causes. It’s important that we empower the voices seeking change.”

Lamb sees implications beyond just the unfairness inherent in a gender pay, she sees it as a structural barrier to a company’s ability to hire top talent. This is apparent in Silicon Valley at firms such as Facebook, which earned an F from Arjuna.

“Sheryl Sandberg [chief operating officer of Facebook] branded herself as a huge proponent of women in the workplace,” Lamb said of Sandberg, who in December warned of a backlash against women in the workplace following high-profile sexual harassment scandals. “All this stuff is happening on the Facebook platform — fake news, hate rhetoric and incitement toward violence. This issue deserves attention.

“Tech companies expect to innovate and push the envelope and be high performing,” Lamb added. “If more women were in more diverse leadership positions, they would perform better. More diversity leads to radical innovation.”

Lamb isn’t averse to publicly shaming corporations. Amazon, initially defensive, tried to fight the shareholder proposal that Lamb introduced at its annual meeting.  “They wanted to keep it off their ballot,” she said. “They lost. They realized they looked awful, publicly and backpedaled.

“We’ve had ongoing battle with Google for three years,” Lamb said. “It’s a classic case study of what not to do. Google ignored us and was investigated regarding its vendor pay, and an employee leaked a salary.”

The search engine behemoth submitted data with the qualification that only covered 89 percent of its employees with analysis. “They didn’t include vice presidents and above,” Lamb said, adding that the numbers were basically useless.

The banking industry’s scores leave the most room for improvement, followed by consumer/retail. “Tech had a head start,” Lamb said. “We started engaging with the sector in 2015. The following year, the sector started to make commitments and improved over time.”

Since the retail industry is dominated by women, it’s no surprise that Lamb is throwing her efforts in that direction. It’s been particularly difficult to get Walmart to agree to start a conversation. “Walmart is defensive about the issue because it has so many problems,” Lamb said. “It’s very disappointing. Walmart is the largest employer in the U.S.”

While Walmart has shown leadership on the environment and hourly wage increases for associates, the retail giant has twice tried to block Arjuna’s shareholder proposal. “We had to pull the proposition last year,” Lamb said. “Walmart was trying to block it because it had pending litigation. We didn’t want to lose this year, so we rejiggered the proposal and put in language that said we’re not looking for anything that would incriminate them. They’re fighting us at the Securities and Exchange Commission and taking a very defensive posture. The judge is taking forever to rule, but we should hear soon.”

Companies that win props for transparency, redouble their commitment to equal pay, according to Lamb. “We’ve seen the technology and bank sectors shift from a defensive stance to proactive posture where equal pay is a badge of honor to attract women and move them into leadership positions,” Lamb said.

Nike is publishing its equal pay gap. “It has a lot of women employees, but there’s still guys in the executive suite,” Lamb said. “They’re taking inclusion and diversity seriously and they’re proactive.”

Aside from Walmart, Lamb said, “we’re making strides in the consumer/retail sector.” Banking has finally agreed to reveal gender pay gaps, but getting them to flip wasn’t quick or easy. Lamb attempted to engage banks at the end of 2016. “It took about a year and a half before we got any of them to move,” she said. “They opposed the proposal in 2017. None of their peers were doing it.”

Then, Citi Group came out with its commitments and gave raises to women and minorities at the firm. “That had a domino effect,” Lamb said. “For six or seven weeks after that we had financial services companies saying ‘yes.’ We brought the issue to the fore, and were pressing them for a year and a half.

“I’m quick to point out that the corporations need to publish their United Kingdom median,” Lamb said. “We said those aren’t going to look good. The U.K. has some of the highest pay gaps in the industry, with some women earning 50 percent of what men earn.”

Lamb was referring to a U.K. mandate for companies to disclose their median and mean gender pay gaps across hourly and bonus pay. This regulation not only affects U.K.-based corporations, but U.S. multi-nationals with more than 250 employees operating in the U.K. Lamb believes it has wider implications. “The future of best practice disclosure should blend the approaches taken in the U.K. and the U.S. and apply it to 100 percent of global operations.”

According to Lamb, the case for change has been made. “We’ve really reached the tipping point,” she said. “We’ve now established corporate best practices. Companies are more aware of the issues and aware that they need to get ahead of this and address it in ways they haven’t before. It’s a new day.”



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