Arjuna Capital, NYC Comptroller Step Up Pressure on Diversity and Pay Equity Disclosures

December 18, 2020

Tech giant Adobe has agreed to provide median gender pay gap disclosures requested by a 2021 shareholder resolution, according to a new press release from activist investor Arjuna Capital.  This will make Adobe one of only a handful of companies (including Mastercard, Starbucks and Citigroup) that have agreed to disclose unadjusted, "raw" median pay gaps across race, gender, or both.  Adobe’s median pay gap disclosure reports an unadjusted pay gap of 1.2% for women worldwide.

It may be harder for companies to avoid these disclosures going forward as momentum builds, even if such disclosures are not required by regulation.  Adobe’s disclosure is also notable for its information on diversity and inclusion at the company, the subject of another wave of proposals from NYC Comptroller Scott Stringer to S&P 100 companies requesting disclosure of their EEO-1 reports.  The 24 proposals submitted last week are a follow-up to the Comptroller’s July campaign which sent letters (but not formal proposals) to S&P 100 companies requesting they disclose demographic data via their EEO-1 report.  The Comptroller reported after that campaign that 40 additional S&P 100 companies had agreed to disclose the information, bringing the total to 54.

Comptroller Stringer’s proposals reflect a consideration for companies.  Corporations that choose to highlight their support for diversity by expressing support for social initiatives will likely be called on to demonstrate their own efforts at improving diversity, equity, and inclusion. 

Outlook:  The dual shareholder campaigns reflect a sharp increase in expectations regarding company disclosures on diversity and pay equity, which up until now have largely been internal initiatives.  Agreeing to disclose this data will affect company rankings on third party advocacy group websites, such as As You Sow’s new Racial Justice Scorecard for the S&P 250.