The Warrior Woman of Arjuna Capital

Moving the needle on gender pay disparity.

What industry has the greatest pay disparity between genders? If you guess the financial advice industry, you’re a winner. The gender pay disparity (GDP) between male and female financial advisors is a whopping 60 percent. These are men and women working at the same job, with the same level of education and years of experience.

Natasha Lamb, a managing partner and co-founder of the Boston-based firm Arjuna Capital, says she was shocked to find out her own occupation has such disparity. Lamb has led the way in addressing GPD. This year alone, Arjuna Capital has filed nine GDP shareholder proposals at major financial institutions. So far, six of the nine – Citigroup, Bank of America, Wells Fargo, Bank of New York Mellon, Mastercard and JP Morgan – have agreed to address GDP and make salary adjustments. Arjuna Capital then withdrew its resolutions for these companies. The three financial firms that have not yet responded are AmEx, Progressive Insurance and Reinsurance Group.

Any shareholder may submit a shareholder resolution, as long as they have continuously held at least $2,000 in market value, or 1 percent, of the company's securities for at least one year by the date the proposal is submitted.

Gaining Momentum

That was a far cry from 2016, when Arjuna Capital filed similar shareholder proposals at six financial institutions, demanding wage disclosure reports, and all were rejected. The same thing occurred in 2017. In 2015, Arjuna Capital targeted Silicon Valley, and the proposals went nowhere. In 2016, there was a sea change, with seven out of the nine tech companies agreeing to address GDP.

natasha lamb1000x667The current score? Out of 25 companies with which Arjuna Capital has filed shareholder resolutions, eight in tech, six in finance and four in retail have passed. The momentum is definitely there. “We don’t know if companies are really taking care of the issue unless there is transparency and disclosure,” says Lamb. “2018 is the first year the banks have responded positively.”

The resolutions include the supporting statement noting, “A report adequate for investors to assess company strategy and performance would include the percentage pay gap between male and female employees across race and ethnicity, including base, bonus and equity compensation, methodology used and quantitative reduction targets.”

On February 23, JP Morgan, the last of the banks to agree to address GDP, released the following statement: “At JPMorgan Chase, we strongly believe that a diverse and inclusive environment is critical to our success. It is simply how we do business. As part of our commitment to fairness in our workplace, we look closely at how we compensate employees—conducting pay equity reviews at all levels of our firm.” The shareholder resolution points out that 54 percent of JP Morgan’s U.S. employees are female, but they hold just one-quarter of executive positions at the bank.

Focus on Sustainability

Lamb started working in financial services in Boston in 2005, after receiving her MBA from Presidio Graduate School – the first school to offer an MBA in sustainable management – and teaching sustainable investing there for five years. She co-founded Arjuna Capital in 2013. Arjuna is named for the warrior hero of the Bhagavad Gita, a revered leader and “champion of enlightened engagement in society.” Lamb defines sustainability as viewing the environment seriously and holding social equity as an important component of economic prosperity. “We look to companies that manage these things well,” she said, giving as examples Starbucks, Unilever, Nike, Dylon, Tokyo Electron and Bright Horizons.

In 2017, Bloomberg Businessweek named Lamb one of the “Bloomberg 50” most influential people defining global business. She is a trustee of The Food Project and Chairman of the Crane Institute of Sustainability.

Why the GDP in Financial Advisory Positions?

Lamb thinks the reason for the GDP in the financial advisory industry results from power dynamics and unconscious bias. “From research, we know women are actually less risk averse as financial advisors,” she says. “There’s a line of thinking that women aren’t as aggressive negotiators. It’s a bit of a problem, but I’m an aggressive negotiator. It becomes victim blaming – that kind of thinking is not helpful.”

Lamb points out that society teaches women to be accommodating, and that sort of thinking must change. However, she says the onus is on companies to analyze and make necessary changes. “That will retain more women and then change the structural makeup, alleviating the power imbalance. It’s a systemic issue,” she says. When asked if she had ever experienced GPD during her career, Lamb answers affirmatively. “I was underpaid during my career, but I didn’t know what my colleagues were paid. The information was difficult to get.” New laws, especially on the state level, are changing that. To date, California, Massachusetts, New York, and Maryland have passed the most stringent equal pay legislation.

Wall Street Culture and Women

Lamb says that in the culture of Wall Street, women are not in positions of power. “They’re given the less profitable and less desirable accounts,” she says. “There’s an imbalance on Wall Street for the positions women are holding.” Lamb adds that although more than 50 percent of the employees on Wall Street are female, they tend to hold lower paying jobs. “We view GPD as a structural issue preventing women from moving up the corporate ladder. We’re trying to address it with transparency and accountability,” she says. The lack of upward mobility for women in the financial industry results in a talent drain, with women more likely to leave positions than in any other career track and head into industries like tech and healthcare. Lamb says the financial institutions agreeing to address GDP view it as competition issue, which is how investors view it as well. “We make the business case for change, because there’s unmitigated risk and potential opportunities,” she says.

It’s not just U.S.-based companies guilty of GPD. Recently, Barclay’s UK revealed a 49 percent GDP. On average, the GDP in British banks is 24 percent.

The Times They Are A’Changing

What changed in a year’s time? Lambs says investors care more, and Wall Street is working with a different landscape due to investor pressure. They must publish their median GPDs this spring. There’s also more awareness of women’s equity, and she thinks the #MeToo movement may have played a part. Lamb notes the considerations were akin to those proposals set before Silicon Valley companies. “The first year, they failed, with only an 8 percent vote. The second year, the vote was 51 percent,” she says.

Still A Long Way to Go

Lamb says that GPD isn’t expected to disappear for 40 years, and that’s a sad reflection on society. “We’re doing work to change the trajectory and accelerate the pace of change,” she says. In 2016, eight years since the Great Recession, the GPD narrowed, but that was also the year the campaign gained momentum and changed public dialog regarding equal pay. “We look for leadership – one company takes a stand, the others follow,” she says. Lamb notes there is no point in waiting for federal regulatory changes. For example, the Payment Fairness Act has been before Congress for years and not gone anywhere. “Changes are at the state level,” according to Lamb. “The tipping point is reached when these kind of disclosures will become the norm and not the exception.”

Future Sectors

After targeting tech, retail and finance, what’s next on Arjuna Capital’s agenda? Lamb says that in 2019, shareholder resolutions will examine different sectors. There has been some quiet progress made in the consumer space, but next year the plan is to put a proposal in front of Walmart, which employs 1 percent of the country. As with other proposals, this one targets women across the board, and not just at the corporate level. “If companies can attract and retain more women and move them into executive positions, the rubber meets the road in performance. It’s the whole pipeline from the bank teller to the CEO,” says Lamb.

Eradicating Fake News

Last spring, Arjuna Capital had proposals regarding content governance – so-called “fake news” – hate speech, sexual harassment and violence, in front of Google and Facebook, and these have been extended to Twitter. “This year, we are partnering with the New York State Comptroller, so there’s more pressure at work,” says Lamb.

In January, in a speech at the World Economic Forum at Davos, British Prime Minister Theresa May urged shareholders to use their influence to ensure companies do not permit hate speech and extremism on their platforms, citing Arjuna Capital’s work in pressuring companies via shareholder resolutions.

For more information on Arjuna Capital, visit:


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