Alphabet Inc. (GOOGL - Free Report) and its Google subsidiary have found themselves at the center of the latest round of questions related to gender pay equity in Silicon Valley. This time, sustainable investing firm Arjuna Capital is accusing the tech behemoth of ducking requests for relevant data and failing to take meaningful action to close the gender pay gap.
In an open letter to Eric Schmidt, Alphabet’s executive chairman, Arjuna Capital managing partner Natasha Lamb expressed her disappointment over the company’s failure to respond to shareholder proposals on the subject.
“After shooting down gender pay equity shareholder proposals for two years running, and now in the wake of contradictory data about the treatment of women at the U.S. tech leader, the board and management of Alphabet Inc./Google must present a detailed report on their gender pay gap data,” an Arjuna Capital press release said.
In the letter, Lamb detailed a meeting with Schmidt at Alphabet’s shareholder meeting earlier this year. According to Lamb, Schmidt indicated that their dialogue on the matter could continue, but she was later “deflected” by the person she was referred to.
At this same event, Arjuna’s proposal asking Alphabet to disclose its gender pay gap, which was co-filed by Baldwin Brothers and Proxy Impact, was rejected for the second time.
“The disclosures we have sought and continue to seek have become common practice in Silicon Valley and amongst your technology peers. Yet Alphabet has refused to disclose the company’s gender pay gap in a transparent, quantitative manner. Instead the company has relied on platitudes that there is no gap, trust us,” Lamb wrote.
Arjuna’s letter also pointed out that Alphabet’s lack of transparency on gender pay equity has made it the subject of various federal, class action, and shareholder actions. Lamb argued that concerned shareholders simply cannot ignore these issues if they are truly are invested in the long-term health of the company.
Lamb’s new demands come in the wake of a recent workplace-related scandal involving a controversial internal memo penned by a Google employee. James Damore, a Google engineer at the time, caused widespread outrage after publishing a 10-page note accusing the company of silencing conservative opinions and arguing that biological differences play a role in the shortage of women in tech.
Damore’s memo quickly circulated throughout the company and was made public shortly thereafter. In response to furor from Google employees and the public at large, Damore was fired for “perpetuating gender stereotypes.”
To Arjuna, the fact that Damore’s opinion ever existed is evidence that Google might be fostering a toxic office environment.
“And the recent episode of a Google engineer issuing a blatantly anti-women ‘manifesto’ can be seen as a reflection of a corporate culture Google has advanced,” Lamb said. “At the same time, the Department of Labor has alleged ‘extreme’ gender pay disparity.”
Lamb also cited a recent New York Times report that suggested Google’s pay gap may be worse than many imagined. According to Lamb, a leaked spreadsheet published by the Times, which included base salary data from nearly 1,200 Google employees, revealed a pay gap in five out of six pay levels, as well as higher bonuses for men in four of the six levels.
In response, Google told the Times that it has ensured nearly 100% gender pay equity, putting its own statistics at odds with the leaked spreadsheet. Lamb outlined several questions that Anjura Capital has about the statistics and ultimately concluded that Alphabet should welcome the opportunity to “clear the air” on the issue of pay equity.
Heading forward, it will be interesting to see how Alphabet chooses to respond to today’s letter. With several other Silicon Valley titans wrapped up in similar scandals, this industry leader has the opportunity to establish positive precedent on what has become a major issue in today’s tech space. Failure to do so, however, could result in even greater shareholder frustration.
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