Shareholders for Alphabet, Google’s parent company, once again rejected a proposal that would require the company to prepare a report on its gender pay data.
This is the second year in a row shareholders nixed such a proposal. But this time, the motion comes in the midst of Google’s very public lawsuit with the Department of Labor over this very same issue.
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Gain company-wide access to our premium content including our monthly webinars, Meeting in a Box, career advice, best practices, and video interviews with top executives.MembershipsAlready a member? Sign in.The excuse comes despite the company’s previous claim that it had already calculated this data on a global scale.
Interestingly, the company claimed in April that it had successfully closed its gender pay gap globally and even provided a step-by-step guide for other companies to follow to do the same.
The proposal, from investment firm Arjuna Capital, would require Alphabet to produce by November 2017 a report detailing the percentage pay gap based on gender with a breakdown by race and ethnicity.
“Genderpay disparity is not only one of the biggest social justice issues of our time, it poses a risk to [Alphabet’s] performance, brand and investor returns,” said Natasha Lamb, director of equity research and shareholder engagement for Arjuna.
“By not addressing the issue at the same level as its peers, Alphabet is put at a competitive disadvantage in the recruitment of candidates and the retention of employees,” Lamb said at the meeting.
But Alphabet’s board of directors recommended the shareholders vote no.
“We have long supported diversity and equality in the workplace,” Alphabet’s opposing statement reads. “We are committed to diversity and equality in all areas of our business, including hiring and compensation.”
Alphabet’s board of directors is about one quarter female. One of the four women on the 15-member board is Shirley Tilghman, former president of Princeton University. While working at Princeton, Tilghman hired Maria Klawe, who now serves as president of Harvey Mudd College, as a dean. When discussing salary, Klawe told Tilghman, “Just pay me what you think is right” and then grossly underpaid her compared to the other deans.
“I probably got a good $50,000 less than I would have if I had been doing my job,” Klawe said in a subsequent interview (at the same time Microsoft CEO Satya Nadella suggested women rely on “karma” when they want a raise).
Google, which has never applied to participate in the Fair360, formerly DiversityInc Top 50 competition, has an astounding lack of diversity in its leadership ranks. According to its owndiversity data, women make up just 24 percent of leadership throughout the company. Ethnic diversity is also dismal, with leadership being 70 percent white, 25 percent Asian, 2 percent Black, 2 percent two or more races, 1 percent Hispanic and less than 1 percent “other.”
The Fair360, formerly DiversityInc Top 50 Companies for Diversity, when expressed as astock index, outperform the rest of the market, suggesting that good judgment in one area permeates throughout an organization.
While Silicon Valley continues struggling with diversity in its ranks, other companies have finally made the move toward transparency. Intel (one of Fair360, formerly DiversityInc’s 25 Noteworthy Companies) shared its pay equity data and announced earlier this year that it had successfully closed its pay and promotion gap.
Google is currently battling a lawsuit with the Department of Labor, which accused the tech giant of withholding information about its pay history. As a federal contractor, Google is required to provide this data for evaluations.
The discrimination “is quite extreme,” even for a tech company, according to a report published last week.
But in May, a lawyer for the company said it would simply be too expensive to calculate the numbers.
The cost About 500 hours of work and $100,000.
“This is obviously a very time-consuming and burdensome project,” said Lisa Barnett Sween, the attorney.
According to the company’s own most recent report cost should be a non-issue. Google ended the first quarter of 2017 with $24.75 billion in revenues, with Alphabet (Google’s parent company) CFO Ruth Porat boasting that “revenues [are] up 22% versus the first quarter of 2016 and 24% on a constant currency basis.”
Given the company’s sky-high profits, “Google would be able to absorb the cost as easy as a dry kitchen sponge could absorb a single drop of water,” said Labor Department attorney Ian Eliasoph.
The female-to-male earnings ratio is 0.80, and women of color are impacted even more by the wage gap. Black women earn about 63 cents to the white man’s dollar; Latinas, 54 cents; and Asian women, 85 cents (some women of Asian subgroups may earn even less, the National Partnership for Women and Families reported).
