Goldman Sachs is facing another round of pressure from investors to disclose data about pay inequities at the Wall Street bank.
For the second year in a row, shareholders have filed a proposal calling for the investment banking giant to report annually on racial and gender pay gaps across its workforce.
The request, which is included in Goldman's latest annual proxy statement, comes amid heightened scrutiny about the dearth of women executives at Goldman. It also follows Goldman's agreement to pay $215 million to settle a gender bias lawsuit.
Like last year's shareholder proposal, this year's measure asks Goldman to disclose two separate metrics — statistically adjusted pay gaps and the unadjusted median pay gap — that would show the differences in pay both between men and women and between minority and nonminority employees.
Goldman is arguing that it has already committed to disclosing more information about its gender and race pay gaps on an adjusted basis annually. Its board of directors is recommending a vote against the proposal, saying that the bank will provide more information about adjusted pay gaps in an upcoming report about the firm's talent, diversity and benefits.
"This disclosure is the next step on the firm's journey of enhanced transparency and accountability regarding the diversity of our workforce," the board wrote.
Newground Social Investment, a registered independent advisor in Seattle, filed the pay-equity proposal on behalf of its clients. Bruce Herbert, founder and chief executive of Newground, said that shareholders want Goldman to disclose both pay gap metrics — statistically adjusted pay gaps and the unadjusted median pay gap — in order to understand the full scope of pay gap data.
Goldman has so far only disclosed adjusted pay gap details, not the unadjusted median pay gap. In its recommendation, Goldman's board wrote that "reporting median pay gaps on an unadjusted basis, as requested in the proposal, does not provide information that is accurate or useful, as it does not take into account" factors such as the employee's role, tenure or geographic location.
The New York-based bank is improving by offering more pay gap details, but the rate of improvement is "so, so slow," Herbert said in an interview Tuesday. "We're calling on them to embrace transparency and reporting in a clear and comprehensive way that they haven't done yet."
The pay-equity reporting request is one of nine shareholder proposals that shareholders will vote on at Goldman's annual meeting, which is set to take place on April 24.
Goldman Sachs is one of several banks that have
Pax World Funds, now known as Impax Asset Management, filed a shareholder proposal with Goldman ahead of the 2017 proxy season, requesting a pay-gap report. That request was withdrawn after the bank agreed to make improvements to its pay equity disclosures, an Impax spokesperson said.
Last year, James McRitchie of CorpGov.Net and other Goldman shareholders filed a proposal that is very similar to this year's version. They argued that it was important to include unadjusted median pay gaps in Goldman's analysis. About 31% of shareholders voted in favor of that proposal at last year's annual meeting.
Arjuna Capital, an activist investor that has led the push for banks to disclose pay gaps, has given Goldman Sachs an "F" grade in each of its annual racial and gender pay scorecards, which Arjuna began publishing in 2018.
The scorecards rank companies in six different categories, using 12 data points, including the U.S. adjusted racial pay gap, the U.S. median racial pay gap, the global adjusted gender pay gap, the global median gender pay gap and the company's public commitment or investor agreement to assess pay equity annually.
Goldman is one of 10 companies that received a failing grade in Arjuna's latest scorecard, due to a lack of pay gap reporting and a lack of transparency into pay gap analyses.
The push for more details about unequal pay dovetails with recent attention on how well Goldman is, or isn't, retaining and promoting women into top-line management jobs.
On March 14, the Wall Street Journal published a story about the
On Monday, multiple media outlets reported that Stephanie Cohen, a veteran Goldman Sachs executive who had once been viewed as a potential successor to CEO David Solomon, was
In May 2023, Goldman settled a decade-old lawsuit alleging systematic discrimination against female employees in terms of compensation, promotions and performance evaluations.
As part of the settlement, the company said it would use an independent labor economist to conduct an annual pay equity analysis for year-end compensation cycles in 2023, 2024 and 2025, according to the judge's order approving the settlement.
The labor economist will analyze base pay, bonus pay and equity awards "to identify potential gender pay gaps between substantially similar employees," the order said. If a gender pay gap exists, Goldman agreed to do more analysis "to determine whether there is a non-gender-based reason for the pay gap" and said that if there is not such a reason, it will "take appropriate steps to address the pay gap," according to the terms of the settlement.
Last week, on the same day that Goldman filed its proxy statement, the bank issued a pay equity statement. It said that it used a third-party labor economist to conduct an adjusted pay gap analysis of 2023 compensation, and it found that the median pay for women across its organization is 99% of the median pay for men. The company also said it determined that the median pay for racial and ethnic minorities in the U.S. is 99% of the median pay for white employees.
Goldman also said that it is "highly focused on providing transparency and accountability to [its] investors and other stakeholders and will continue to regularly report on the firm's progress."
It vowed to share annual employment information data that's filed with the U.S. Department of Labor. That information will be included in its company's upcoming report on talent, diversity and benefits.
Herbert, of Newground Social Investment, said Goldman has a "tremendous opportunity to move forward more into the light of day and learn from past experiences and frankly past mistakes."
"They're edging in that direction, but they haven't fully embraced it yet," he said.
