Citigroup revealed on Wednesday that its female employees globally earn 29 percent less than males, while U.S. minorities earn even lower – a whole 7 percent less than non-minority employees. Citigroup is the first U.S. bank to publish unadjusted pay gap figures, which the financial institution defined in a press release as “the difference in median total compensation when we don’t adjust for factors such as job function, level and geography.”
However, when these factors are adjusted, the bank claims that women globally are paid 99% of what men are paid on average and there is no statistically significant difference between the earnings of U.S. minorities and non-minorities. Yet Citi’s analysis also found that women are underrepresented in the bank’s top ranks. In fact, they make up just 37 percent of senior positions between the assistant vice president level and the managing director level.
Citigroup revealed its compensation data after activist shareholder Arjuna Capital pressed for a report on its global median pay gap. “This new level of transparency provides investors with baseline metrics to understand broad pay equity at the company,” said Arjuna managing partner Natasha Lamb. In addition, she stated that investors view pay gap disclosures as “benchmarks to improved diversity in representation, and the performance benefits that diversity affords.”
The company’s pay gap disclosure is a prime example of why investors are pushing for more diversity in companies’ leadership. Last year, BlackRock, the world’s largest asset manager, urged companies to add at least two female directors onto its boards.
“This is not simply just a good thing to do or corporate responsibility,” Lamb told Bloomberg last year. “There really is a profit motive here as well in order to attract and retain top talent.”
Citigroup pledged to increase its representation of women and U.S. minorities in higher-level roles, as Forbes reports. Meanwhile, the company plans to hit 40 percent of female representation globally at the assistant vice president through managing director levelsand 8% for black U.S. employees by the end of 2021.
Citigroup continued saying its committed to narrowing the wage gap for both groups, admitting that the company still has progress to be made. “This reiterates the importance of our goals to increase representation of women and U.S. minorities in senior and higher-paying roles at Citi,” Sara Wechter, Citigroup’s head of human resources, said in a release. “That is how we will reduce the difference in our raw pay gap numbers over time.”