Shareholders to Goldman Sachs: Report Worker Pay Equity Data
Following Goldman's settling of a 10-year sexual discrimination lawsuit in 2023, for $215 milllion, Newground filed a shareholder proposal at Goldman Sachs (ticker: GS) that asks the Board for a comprehensive report on inequities in race and gender-based compensation among all employees. This proposal will be voted on at Goldman's 2024 shareholder meeting (expected in early May). The full text of the proposal appears below, and is also available in its original format as a downloadable PDF.
Companies enjoy touting their "rate of improvement", and Goldman is no exception. Which is why we particularly like this part of the shareholder proposal, which makes projections of "progress" based on Goldman's own figures:
At the current trajectory, White women will not reach pay equity until 2059 – three decades from now; Black women not until 2130 – a century from now; and Latina women not until 2224 – two full centuries from now.
The full text of the resolution follows.
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Pay Equity Reporting
Resolved: Shareholders request that the Goldman Sachs Group, Inc. (“Company”, “Goldman Sachs”, or “Goldman”) report annually on unadjusted median and adjusted pay gaps across race and gender globally, and include associated policy, reputational, competitive, and operational risks – including risks associated with recruiting and retaining diverse key talent. The report should be prepared at reasonable cost, and omit proprietary information, litigation strategy, and legal compliance information.
Ideally, annual reporting would integrate base, bonus, and equity compensation broken out by country, where appropriate, and further differentiate between gender and racial/minority/ethnicity groupings.
Racial/gender pay gaps are the difference between non-minority and minority/male and female median earnings expressed as a percentage of non-minority/male earnings.
Supporting Statement
Goldman Sachs has faced substantial scrutiny in recent years for gender pay discrimination, which culminated in a $215 million class-action settlement in May 2023.[1] Ongoing pay inequities – which persist across both race and gender at Goldman – pose substantial risks to the Company. For instance, Black workers’ median annual earnings represent just 77% of white wages, while the median income for women working full-time is only 84% that of men. Considering race, Black women earn 76% and Latina women just 63%.[2]
At the current trajectory, White women will not reach pay equity until 2059 – three decades from now; Black women not until 2130 – a century from now; and Latina women not until 2224 – two full centuries from now.[3]
Citigroup estimates that had minority and gender wage gaps been closed 20 years ago, it would have contributed $12 trillion additional dollars to national income.
Studies link diversity in leadership and managing pay equity to superior stock performance as well as higher return on equity.[4]
Women and minorities clearly face structural bias regarding job opportunity and pay. At Goldman, underrepresented minorities represent 47.0% of the workforce but only 26.7% of executives. Women represent 42.9% of the workforce but only 25.1% of executives.
Best practice pay equity reporting consists of two parts:
- Statistically adjusted gaps – which assess whether minorities and non-minorities (both men and women) are paid equally for similar roles.
- Unadjusted median pay gaps – which assess equal opportunity for high paying roles.
Currently, Goldman reports neither adjusted nor unadjusted quantitative pay gaps. In contrast, roughly 50% of the nation’s top 100 companies report adjusted gaps, and an increasing number also disclose unadjusted gaps.[5]
Racial and gender unadjusted median pay gaps are accepted as the valid way to measure pay inequity by the United States Census Bureau, Department of Labor, OECD, and the International Labor Organization. The United Kingdom and Ireland legally mandate disclosure of median gender pay gaps.[6]
Therefore: Because gender and equity pay gaps are inherently unfair, because they have been shown to harm company performance, and because disparity continues to be a serious issue that plagues Goldman Sachs, please vote FOR this commonsense reporting proposal.
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[1] https://www.nytimes.com/2023/05/09/business/dealbook/goldman-sachs-discrimination-lawsuit.html
[2] https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-pinc/pinc-05.html
[4] Ibid.
[5] https://diversiq.com/which-sp-500-companies-disclose-gender-pay-equity-data/
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Note: This material is intended for educational purposes only. As with all our public writing, blog posts do not constitute tax or financial planning advice; likewise, they are neither an offer to sell nor solicitation to buy any investment or security.
