In a big boost to gender pay equality, Amazon has been ordered by the SEC to allow the online retail giant’s shareholders the right to vote on the issue. The retailer previously requested permission to omit the measure from its annual ballot, but it appears that motion has been denied. An activist arm of an investment firm is spearheading the movement to ensure the pay remains completely independent of gender.
The U.S. securities regulator decided this week that Amazon.com Inc. should allow its shareholders to vote on a proposal that deals with gender pay equality. Interestingly, Amazon had sought legal recourse in an attempt to completely avoid the topic, reported The Christian Science Monitor. It intended to keep the shareholders from voting on whether it should work to reduce the gap between how much it pays male and female staff.
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In an effort to keep the decision on reducing gender pay gap well within the purview of the company, Amazon’s lawyers asked the U.S. Securities and Exchange Commission (SEC) to give it permission to omit the inclusion of a vote on addressing the gender pay gap at its forthcoming shareholding meeting, reported The Guardian. Legally, the lawyers argued that the giving the choice of vote on gender equity to the voters would be “impermissibly vague and misleading.”
“The proposal is so vague and indefinite, as to make it impossible for either the board of directors or stockholders at large to comprehend precisely what the proposals would entail.”
The lawyers were responding to the proposal submitted by Arjuna Capital, the activist arm of investment firm Baldwin Brothers Inc. Through the proposal, the activist firm officially requested Amazon prepare a report on its “policies and goals to reduce the gender pay gap.” The firm had asked Amazon to submit its report by October 2016, but the retailer took objection, questioning the feasibility and viability of such a request.
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Besides Amazon, Arjuna Capital sent requests for similar proposals to eight other technology companies, including eBay Inc. and Intel Corp., reported CBC News. However, besides Amazon, no other company appears to have taken the legal route to avoid the discussion. Apple CEO Tim Cook confirmed the company had 99.6 percent gender pay equality at base as well as bonus pay levels. Intel went a notch higher and insisted that the company has 100 percent gender pay equality at base and bonus pay levels, reported Reuters. Online travel assistance company Expedia shared it was already working at reducing the gap.
The firm’s director of shareholder engagement, Natasha Lamb, shared she wasn’t surprised and pretty much expected “some pushback” from Silicon Valley companies. However, she was “shocked” after hearing from Amazon and noting they were attempting to circumvent the issue by labeling it too vague.
“They argued that shareholders wouldn’t know what the gender pay gap is and might get confused. It’s pretty clear. This is a problem, particularly for technology companies. Silicon Valley has an atrocious record on diversity; the number of women in the ranks is very low. It is impossible to know for sure how much less women in technology firms are paid compared with men, and the lack of transparency is a key part of the problem.”
Though the gender pay camp doesn’t have concrete industry-wide statistics, Lamb cited a report by technology recruitment firm Dice, which claimed on average men earned nearly $10,000 more than women in 2014. If such resistance is continued to be encountered, the gender pay gap would take a long time to diminish, she continued.
“Across the country women earn 79 cents to every dollar earned by men, and at the current rate of change that gap won’t close until 2058.”
In its ruling, the SEC noted that Amazon may not omit the proposal. It ordered the retailer to consider including the option during the company’s next shareholder meeting, scheduled to take place in May.
— Tana Senn (@TanaSenn) March 18, 2016
American enterprises have dragged their feet while working at reducing gender pay equality, and ethnic diversity as well. However, many companies have now actively begun to focus on the issue.
[Photo by Bartek Sadowski/Bloomberg/Getty Images]