13 Companies Earn an “A” on ‘Racial and Gender Pay Scorecard

The latest report on pay equity from Arjuna Capital and Proxy Impact has been released. It’s called the “Racial and Gender Pay Scorecard”, and it grades 68 companies on their pay equity disclosure practices.

Of those 68 companies, 13 earned an “A” grade—Target, Starbucks, Mastercard, Microsoft, Pfizer, Bank of New York Mellon, Citigroup, Adobe, American Express, Visa, Lowe’s, Best Buy and Home Depot. These companies were in the top 10% for their disclosure practices—meaning that they were particularly transparent about how they determined their pay practices.

25 received an “F” grade (meaning they were ranked in the bottom 10% of scores) while Target received a perfect score—meaning they had the most transparent policies in place when it came to pay equity. This is the first time in the history of this report that a company has received a perfect score!

The grades are based on quantitative disclosures (versus qualitative assurances). The 68 companies in the ranking have all been engaged by investors through shareholder proposals and asked to improve their pay equity disclosures. 

The scorecard highlights an increasing number of companies that are setting a new standard for the accountability and transparency needed to close persistent racial and gender pay gaps. Last year, U.S. Black workers’ median earnings represented 81% of white workers’ earnings and women’s earnings represented 83% of men’s earnings.

Key findings of the report include:

• The first perfect score: Target receives the 1st perfect score of A+ on the “Racial and Gender Pay Scorecard,” with Starbucks close behind. Both companies report 100% racial and gender pay equity on both an adjusted and unadjusted median basis for 100% of their employee population, assessed on all components of compensation — base, bonus, and equity. 
• Top of the class: 50% more companies earn a grade of “A” this year, with 13 companies receiving this score due to comprehensive racial and gender pay gap disclosures. 
• Rising stars: 15 companies improve their scores year-over-year. Lowe’s and Best Buy saw the largest score increase from an F to a B, as they began disclosing comprehensive adjusted and unadjusted median racial and gender pay gaps.
• Falling behind: Intel’s (D) and Alphabet’s (F) scores fall for failing to disclose quantitative pay gaps or methodology within the last two years, despite commitments to investors. Four companies — Cigna, eBay, Intel, and Google — lose ground from last year. 
• Failing to disclose: 25 companies earn a failing grade of “F” due to their lack of transparency, including Alphabet, Goldman Sachs, Marriott, Charles Schwab, and Walmart. Eighteen of these companies — remain on the failing list from last year.
• Leading Sector: Consumer companies lead the way on pay gap disclosures, with the sector comprising 38% of companies awarded an “A” score. Five consumer companies — Target, Starbucks, Lowe’s, Best Buy, and Home Depot — report median pay gaps. According to PayScale, 58% of retail and customer service companies plan to conduct a race or gender pay equity analysis in 2023.
• Lagging Sector: The healthcare sector lags behind, with only Pfizer disclosing median pay gaps and Thermo Fisher committing to disclose median gaps this year. The healthcare industry is reported to have the third widest pay gap across 15 industries. 

• Median Pay Disclosure Gaining Momentum: While many companies only disclosed statistically adjusted pay gaps in the past, more and more companies are disclosing unadjusted median racial and gender pay gaps beyond their U.K. data, which is mandated. Of the 68 companies covered by the scorecard, 18 companies currently disclose or have committed to disclose in the next year.  This includes: Target, Starbucks, Lowe’s, Best Buy, Home Depot, Chipotle, Mastercard, Bank of New York Mellon, Citigroup, American Express, Pfizer, Microsoft, Adobe, Visa, Disney, Amalgamated, BlackRock, and Thermo Fisher. 
• 158 Investor Proposals: Over the last nine years, 158 shareholder proposals requesting pay gap disclosures have been filed at more than 90 companies (including the 68 in the scorecard).

Target Corporation

$165.63

$5.36

3.34%

Starbucks Corporation

$104.13

$2.81

2.77%

Mastercard Incorporated

$363.41

$4.15

1.16%

Microsoft Corporation

$288.30

$4.25

1.50%

Pfizer, Inc.

$40.80

$0.42

1.04%

The Bank of New York Mellon Cor

$45.44

$0.54

1.20%

Citigroup, Inc.

$46.89

$0.82

1.78%

Adobe Inc.

$385.37

$3.47

0.91%

American Express Company

$164.95

$2.54

1.56%

Visa Inc.

$225.46

$3.10

1.39%

Lowe's Companies, Inc.

$199.97

$7.32

3.80%

Best Buy Co., Inc.

$78.27

$2.95

3.92%

Home Depot, Inc. (The)

$295.12

$9.76

3.42%