Shareholders Ask Retailers to Mind the Pay Gap

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By Andrea Vittorio

Retailers are the latest industry to face shareholder activism about unequal pay.

“Stubborn” pay gaps not only between men and women but also across race and ethnicity are the subject of a new shareholder resolution submitted at TJX Cos., the owner of T.J. Maxx, Marshalls and HomeGoods. Starbucks Corp. and Wal-Mart Stores Inc. are also being asked about pay equity in their workforces.

“That’s relevant in most companies, but it’s especially relevant in retail,” said Pat Miguel Tomaino, associate director of socially responsible investing at Zevin Asset Management LLC, which filed the TJX proposal.

Women hold about half of retail industry jobs, but they are underrepresented in higher-paying management positions and overrepresented in low-paying frontline positions, the resolutions say.

The same can be said for black and Latino retail workers, who as full-time salespersons get paid 75 percent of their white peers’ wages, according to research from the progressive think tank Demos. Women who are retail salespersons earn about 71 percent of what men earn, according to an analysis by the Institute for Women’s Policy Research.

No Gap at Gap

Arjuna Capital filed the Starbucks and Wal-Mart resolutions after a series of successful proposals seeking to close the gap between what men and women make in the technology industry. Arjuna, Pax World Management LLC and Trillium Asset Management are also focusing on diversity in finance.

When Arjuna started the campaign in 2014, the only Fortune 500 company that voluntarily reported on its gender pay gap was, ironically enough, Gap Inc. The clothing retailer found no significant gender wage difference between women and men who work there.

“I don’t think work is done on the gender pay gap,” Natasha Lamb, who directs equity research and shareholder engagement at Arjuna Capital, told Bloomberg BNA.

One change Arjuna made to its proposals this year was to ask companies for the percentage pay gap both between men and women and on the basis of race or ethnicity. “It’s important to address all elements of fair compensation,” Lamb said.

Be Prepared

Research from McKinsey & Co. and others shows that companies with more diverse workforces perform better financially.

“That will drive mainstream asset managers’ view on these proposals,” said Chad Spitler, who spent 15 years at BlackRock before joining CamberView Partners LLC as chief operating officer and head of its sustainability practice. CamberView advises public companies on shareholder activism and engagement.

Even if the resolutions don’t end up going to a vote or getting majority votes from shareholders, Spitler said that “companies should be prepared to engage on the topic of pay disparity as well as diversity.” Pay data is being added to the diversity data that the federal government collects from employers under a new reporting requirement from the Equal Employment Opportunity Commission that starts in March 2018.

TJX declined to comment. Starbucks did not return a request for comment. Wal-Mart said it would address shareholder proposals when it issues its proxy statement.

To contact the reporter on this story: Andrea Vittorio in Washington at

To contact the editor responsible for this story: Yin Wilczek at

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