Google: Disclose and Close Your Pay Gap

Alphabet Inc.

Google should disclose, and take concrete steps to close, its global median gender pay gap.

The World Economic Forum estimates the gender pay gap costs the economy 1.2 trillion dollars annually. [1] The median income for women working full time in the United States is 80 percent of that of their male counterparts. [2] This disparity can equal nearly half a million dollars over a career. The gap for African American and Latina women is 60 percent and 55 percent. [3] At the current rate, women will not reach pay parity until 2059. [4]

United States companies have begun reporting statistically adjusted equal pay for equal work numbers, assessing the pay of men and women performing similar jobs, but mostly ignore median pay gaps. Regulation in the United Kingdom now mandates disclosure of median gender pay gaps. And while Google reported a 16 percent median hourly pay gap and 27 percent median bonus pay gap for its United Kingdom operations, [5] it has not published median information for its global operations.

Google reports that for 89 percent of Googlers there are 0 statistically significant pay differences between men and women. [6] Yet, that statistically adjusted number alone fails to consider how discrimination affects differences in opportunity. In contrast, median pay gap disclosures address the structural bias that affects the jobs women hold, particularly when men hold most higher paying jobs. Google itself acknowledges that it is “not proud of these numbers”, which are driven by a representation gap. [7]

Women account for 30.9 percent of Google’s global workforce and 25.5 percent of senior leadership roles. [8] Mercer finds actively managing pay equity “is associated with higher current female representation at the professional through executive levels and a faster trajectory to improved representation.” [9]

Research from Morgan Stanley, McKinsey, and Robeco Sam suggests gender diverse leadership leads to superior stock price performance and return on equity. McKinsey states, “the business case for the advancement and promotion of women is compelling.” Best practices include “tracking and eliminating gender pay gaps.” [10]

Public policy risk is of concern, not only in the United Kingdom, but in the United States as well. The Paycheck Fairness Act pends before Senate. California, Massachusetts, New York, and Maryland have strengthened equal pay legislation. The Congressional Joint Economic Committee reports 40 percent of the wage gap may be attributed to discrimination. [11]

We request that Alphabet/Google report on the company’s global median gender pay gap, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining female talent.

The gender pay gap is defined as the difference between male and female median earnings expressed as a percentage of male earnings (Organization for Economic Cooperation and Development).

A report adequate for investors to assess company strategy and performance would include the percentage global median pay gap between male and female employees across race and ethnicity, including base, bonus and equity compensation.

[1] https://www.weforum.org/reports/the-global-gender-gap-report-2018

[2] https://iwpr.org/publications/gender-wage-gap-2016-earnings-differences-gender-race-ethnicity

[3] https://iwpr.org/publications/gender-wage-gap-2016-earnings-differences-gender-race-ethnicity/

[4] https://iwpr.org/publications/gender-wage-gap-2016-earnings-differences-gender-race-ethnicity/

[5] https://static.googleusercontent.com/media/diversity.google/en//static/pdf/uk-gender-pay-report-2017.pdf

[6] https://rework.withgoogle.com/blog/googles-commitment-to-fair-and-equitable-pay-2018/

[7] https://static.googleusercontent.com/media/diversity.google/en//static/pdf/uk-gender-pay-report-2017.pdf

[8] https://diversity.google/annual-report/

[9] https://www.mercer.com/newsroom/mercer-study-reveals-well-intended-efforts-on-gender-diversity-not-improving-workforce-progression-of-women.html

[10] https://www.mckinsey.com/business-functions/organization/our-insights/promoting-gender-parity-in-the-global-workplace

[11] https://www.jec.senate.gov/public/_cache/files/0779dc2f-4a4e-4386-b847-9ae919735acc/gender-pay-inequality----us-congress-joint-economic-committee.pdf