Numerous studies show women are paid less than their male counterparts. This is a key challenge for companies as they face reputational risk, consumer backlash, new legislation, and governmental and employee lawsuits. Just the perception of a gender pay gap can make it hard to recruit or keep top talent. 

Equal pay is also more than a question of fairness. It would help grow the economy, strengthen single parent families, cut the poverty rate for working women, and make business more competitive.

Over the last five years, shareholders have engaged more than 50 companies through dialogues and resolutions, asking about their analyses, policies, and goals to track and reduce any gender pay gap.  Many of these companies, particularly in the tech and finance sectors, quickly stated that female pay was 99 percent that of male peers.  

These responses relied on adjusted pay, which looks at comparable criteria such as education, occupation, seniority, or geography. This method identifies inequality among similar workers for similar jobs.

One problem with these assertions of 99 percent pay equity is a lack of transparency and the omission of data. For example, Google’s 2018 gender pay report did not include the highest earning 11 percent of management (where the biggest discrepancies exist).

Even if all the data is accurate, we are left with a snapshot of equal pay, not a wage gap.

Since 2018, UK companies must disclose median and mean gender pay gaps across hourly and bonus earnings. Median pay compares unadjusted data. The Organization for Economic Cooperation and Development (OECD) considers this a better measure of the pay gap. The OECD reports that income for women working full time in the U.S. is 80 percent of what men receive. The gap for African American and Latina women is 60 percent and 55 percent, respectively. At the current rate, women will not reach pay parity until 2059.

By comparing median pay, the same companies that found 99 percent equal pay in their U.S. operations found differences of 15 to 30 percent (or more) in their U.K. operations. This difference comes from most women being in lower paying jobs (where equal pay is more likely) and higher paid jobs being overwhelmingly male.

While salary policies can help ensure equal pay for equal work, providing equal opportunity to move up the corporate ladder requires more specific action from management, including stronger commitments to recruitment, development, and retention.

Ultimately, it is both equal pay and equal opportunity that will eliminate the gender pay gap.

Proxy Impact and Arjuna Capital publish an annual Gender Pay Scorecard.  We have found few U.S. companies provide both adjusted and unadjusted data, but a new gender pay report by Citigroup is helping to set a standard for what this reporting should look like.

Only with more complete and transparent reporting will we know if women are being paid equally and moving into higher paying leadership positions. 

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Michael Passoff is the founder and CEO of Proxy Impact, a shareholder advocacy and proxy voting service for sustainable and responsible investors.