Employees, shareholders, and many other stakeholders are beginning to see pay equity as a fundamental expectation among public and private companies ― and for good reason. A more equitable pay practice drives better attraction and retention of talent, a more diverse culture, and through that, better financial performance over the long term.
Some of the largest institutional shareholders now consider social and governance factors such as workforce diversity, pay transparency and pay equity as a part of their annual reviews, investment decisions and voting determinations. Blackrock and State Street, for example, have increasingly supported shareholder proposals in the last few years surrounding environmental, social and governance (ESG) efforts, including those that push for pay transparency and reporting around the diversity of the workforce.
