BOSTON, MA // FEB. 10, 2016: The U.S. Securities and Exchange Commission (SEC) recently rejected Citigroup’s request for “No-Action” on a Gender Pay Gap shareholder proposal that was filed by Trillium Asset Management (Trillium), a Boston-based investment firm.
Investors are requesting that Citigroup (NYSE: C) prepare a report demonstrating that the company does not have a gender pay gap.
The financial services sector is routinely found to have one of the widest gaps in pay by gender relative to other parts of the economy. Despite women making up nearly one third of the financial services workforce, on average women earn significantly less than their male colleagues.
Citigroup submitted a “Statement of Intent to Exclude” notice with the SEC on the grounds that the proposal was “vague” and investors were attempting to “micromanage the company’s employment practices” by asking for non-proprietary gender pay information. The SEC rejected Citigroup’s assertion and has permitted the proposal to appear on the company’s proxy statement to be published in March.
The persistence of gender pay disparity is evident through the numerous lawsuits brought at major financial services firms. Companies including Morgan Stanley, Wells Fargo, Bank of America, and even Citigroup, have all settled gender discrimination lawsuits ranging from $32 – $46 million. These lawsuits are costly to the company and costly to shareholders.
“There is a large body of evidence suggesting that diversity leads to better company performance,” said Brianna Murphy, Trillium’s Vice President, Shareholder Advocacy. “We believe that Citigroup would have a competitive edge in hiring employees who know they will be fairly compensated regardless of their gender. In a sector that has been routinely found to have the widest gender pay gap, investors are seeking assurance that Citigroup is mitigating the risk that this critical issue may pose.”
In attempt to address discriminatory pay practices faced by women across many industries, the White House recently announced a rule that would require companies to incorporate similar pay data into Equal Employment Opportunity (EEO) reporting.
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Founded in 1982, Trillium Asset Management is the oldest investment advisor focused exclusively on sustainable and responsible investing. Trillium manages over $2 billion in assets for clients including individuals, foundations, endowments, religious institutions, and other non-profits. Trillium leverages the power of stock ownership to promote social and environmental change while providing both impact and performance to our investors. To learn more, please visit www.trilliuminvest.com.
For more information: Randy Rice, Trillium Asset Management, rrice@trilliuminvest.com, 617-515-6889
Important disclosure: The information provided in this material should not be considered a recommendation to buy or sell the security mentioned. It should not be assumed that investments in such security has been or will be profitable. To the extent a specific security is mentioned, it was selected by the authors on an objective basis to illustrate views expressed in the commentary and it does not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is for informational purposes and should not be construed as a research report.
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