Big Banks Reveal Gender Pay Differentials
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What is the main topic discussed in this episode?
This is Your Money Matters from The Wall Street Journal. Welcome to Your Money Matters. I'm J.R. Whalen in New York. The renewed awareness of gender equality in the workplace and social campaigns like the Me Too movement have big banks on Wall Street reviewing how they pay women and minorities and releasing that data to the public. And Wall Street Journal reporter Rachel Louise Ensign joins us to discuss. So, Rachel, some might perceive Wall Street and the banking industry as what might be described as a, quote, boys club. But Bank of America's pay revelations, for one, it's the latest bank to review and release its pay practices as it pertains to genders and minority.
Yes. So the question of gender on Wall Street is pretty interesting. I mean, on one hand, we don't have a female CEO of any of the largest banks.
How did Bank of America publicly report its gender and minority pay gaps?
A lot of the prominent lines of business are dominated by men and male executives and But at the same time, a lot of these companies have actually been at the forefront of different efforts and councils that are trying to kind of make there be more equality in the workplace and make sure women are on boards and things like that. So basically, Bank of America sent out – an email yesterday, a memo internally that we've reported on where their head of HR said that they've done an internal study and determined that women are paid 99% of men and minorities are paid 99% of non-minorities. So it was the first time that they've released this information publicly or at least within the bank before, even though they've obviously been looking at this for years.
And it was about a year ago that Bank of America and several other banks rejected shareholder requests that they release a report on this data. What has changed since then?
It's a good question. I mean, obviously, there's no need to explain how much the whole environment and national discussion have changed.
Why did banks previously reject shareholder requests to disclose pay data?
But I do think that some of the – my recollection is that the banks rejected those proposals because – They kind of wanted to crunch the numbers themselves instead of having to go by all these terms and conditions that the proposal set. But, I mean, I think there's probably a good argument that those kinds of proposals and other endeavors like that did kind of boost the pressure on the banks to do something like this.
And then with regard to putting pressure on the banks, it seems that other countries are being a little bit more strict with banks when it comes to releasing data like this.
Yeah. So apparently the U.K. is kind of considering proposing that banks have to do this sort of thing, which definitely does not exist in the U.S. at all.
What external pressures and international rules are influencing banks to publish pay statistics?
And, you know, doesn't really seem to be any prospect for that.
We're speaking with The Wall Street Journal's Rachel Louise Ensign, and you're listening to your Money Matters from The Wall Street Journal. Welcome back, everybody. So, Rachel, we mentioned Bank of America has disclosed the gender pay differential and it shows that women make 99 percent of what men make. But it is also going to change some of the questions it asks job candidates going forward.
Yeah. So also in that memo, the bank said that they plan to further restrict asking job applicants about salary history. And basically that sort of already is restricted in a number of states where they have to follow those laws, obviously.
What did Bank of America change about asking job candidates their salary history?
But they're planning on extending it further. And they say the reason to do this is that they're hiring people and paying them on the basis of their skills and their talent and not on the basis of what they've been paid before.
So they're going to do this with job candidates regardless of whether a state forbids it or not?
Yes.
Okay. And then Citigroup has also released its analysis of its own pay practices.
How do Citigroup’s pay-differential results compare to Bank of America’s findings?
They did that earlier this month.
Yes, they did. They released it last week, but I think the memo was sent out two weeks ago. And their results were nearly identical to Bank of America. They said that men, I mean women, sorry, are paid 99% of men, minorities 99%. of non-minorities though with both of these studies we have to kind of keep in mind that they don't really release the full methodology for this so you know it's something they're putting out there and i'm sure there's a lot of science behind it but we don't know exactly how they're calculating those figures so this is bank of america and city group two of several big banks on wall street i guess that these two would put pressure on other banks to to make a similar move
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:02–0:55
2
How did Bank of America publicly report its gender and minority pay gaps?
0:55–2:02
3
Why did banks previously reject shareholder requests to disclose pay data?
2:02–2:48
4
What external pressures and international rules are influencing banks to publish pay statistics?
2:48–3:31
5
What did Bank of America change about asking job candidates their salary history?
3:31–3:56
6
How do Citigroup’s pay-differential results compare to Bank of America’s findings?
3:56–4:40
7
What limitations exist in the banks’ released pay studies and what might happen next?
4:40–5:15
Speakers
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