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Arjuna Capital/Proxy Impact: Target Corp. Earns 1st Perfect Score on "Racial and Gender Scorecard" This Equal Pay Day, While Women and People of Color Continue to Experience Large Pay GapsArjuna Capital and Proxy Impact released their 6th annual "Racial and Gender Pay Scorecard" today to mark Equal Pay Day on March 14th. Of 68 companies examined, 13-Target, Starbucks, Mastercard, Microsoft, Pfizer, Bank of New York Mellon, Citigroup, Adobe, American Express, Visa, Lowe's, Best Buy, and Home Depot- receive an "A," while twenty-five companies receive an "F." Target is the 1st company in the history of the Scorecard to earn a perfect score-A+. The grades are based on quantitative disclosures (versus qualitative assurances). The 68 companies in the ranking have all been engaged by investors through shareholder proposals and asked to improve their pay equity disclosures. Natasha Lamb, managing partner of investment management firm Arjuna Capital, said: "Target's score of A+ is really something to celebrate this Equal Pay Day. Racial and gender pay gaps are structural and persistent, but the Scorecard holds up those companies that are doing the real and honest work to create pay equity." "Women and people of color are almost always deeply underrepresented in higher paying positions," said Michael Passoff, CEO at shareholder advocacy firm Proxy Impact. "Median pay gap data sheds a light on that problem, and studies show that companies that disclose pay gaps are more likely to fix them." Key findings of the report include:
Unfortunately, the COVID-19 pandemic exacerbated pay inequity, as millions of minorities and women were forced to leave the workforce. While employment rates have since recovered with a 23% increase in women's labor participation in 2022, women have only experienced a 2% decrease in the gender pay gap over the last twenty years. Companies like Target and Starbucks are showing leadership by disclosing 100% unadjusted and adjusted racial and gender pay equity. And while other companies like Citigroup and Bank of New York Mellon have not yet achieved 100% unadjusted racial and gender pay equity, they are leading the way in transparency, allowing them to incrementally close gaps over time. These companies provide examples of best practice pay equity reporting. The Racial & Gender Pay Scorecard assesses companies' pay equity data against best-practice pay equity reporting standards, which consist of two important elements: (1) unadjusted median pay gaps, assessing how jobs are distributed by race and gender and which groups hold the high-paying jobs, and (2) statistically adjusted gaps, assessing pay between minorities and non-minorities, men and women, performing similar roles. While statistically adjusted gaps provide one piece of the story, median pay gaps are a critical and more revealing standard. Median pay gaps show, quite literally, how the company assigns value to its employees through the roles they inhabit and the pay they receive. Actively managing pay equity is a business imperative, as it leads to improved representation, superior stock performance, and higher Return on Equity. It's also good for the economy. Citigroup estimates that closing U.S. minority and gender wage gaps 20 years ago could have generated 12 trillion dollars in additional national income and contributed 0.15 percent to United States GDP per year. McKinsey projects that closing the racial wealth gap could increase GDP by 4-6% by 2028, netting the U.S. economy $1.1-$1.5 trillion. ABOUT THE REPORT AUTHORS Arjuna Capital is a sustainable and impact investment firm that works with high-net-worth individuals, families, and institutions to invest their assets with a lens toward Environmental, Social, and Governance (ESG) risk and opportunity. Natasha Lamb and Arjuna Capital have been recognized for using shareholder resolutions to promote gender and racial pay equity in the tech, banking, and retail sectors. Lamb was named to the "Bloomberg 50" list of influencers who defined global business in 2017. For more information, visit www.Arjuna-Capital.com. Proxy Impact provides shareholder advocacy and proxy voting services that promote sustainable and responsible business practices. Proxy Impact's Women's Inclusion Project engages companies on issues of board diversity, workplace diversity, racial and gender pay gaps, and child sexual exploitation online. For more information, visit www.proxyimpact.com.
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