Citigroup discloses it pays women 29 percent less than their male counterparts

The banking group has faced pressure in the U.S. and abroad to address pay disparity. The unusual announcement has fired up critics and activists online; others applaud Citi’s candor.

In a surprising moment of transparency, Citigroup announced that the gender pay gap is real for its employees.

On average, women working for the banking group make 29 percent less than men when the figures are not adjusted for job function and background. The public statement goes beyond earlier figures released under pressure from regulators and stockholders.

It shared the news in a blog post, which reads in part:

Citi’s commitment to diversity and inclusion is longstanding. Last year, Citi was the first financial institution to publicly release the results of a pay equity review comparing compensation of women to men, and U.S. minorities to U.S. non-minorities. Our review was conducted in three countries representing 36% of our workforce, with a commitment to do the work across all countries where we currently have colleagues. We did this because we believe increasing our transparency in this critical area is the best way to hold ourselves accountable for making progress.

As we committed, this year we extended our pay equity review to cover all of our colleagues globally. Like last year, our review adjusted pay to account for a number of factors to make the comparisons meaningful, including job function, level and geography. On this adjusted basis, we found that women globally are paid on average 99% of what men are paid at Citi. We also repeated the assessment for U.S. minorities and are pleased that after last year’s actions, there was no statistically significant difference between what U.S. minorities and non-minorities are paid at Citi. We made pay adjustments as part of this year’s compensation cycle following our review.

Today, we’re also being transparent about another piece of information. We’ve calculated our unadjusted or “raw” pay gap for women and U.S. minorities – which measures the difference in median total compensation when we don’t adjust for factors such as job function, level and geography. This analysis shows that the median pay for women globally is 71% of the median for men, and the median pay for U.S. minorities is 93% of the median for non-minorities. This reiterates the importance of our goals to increase representation of women and U.S. minorities in senior and higher-paying roles at Citi. That is how we will reduce the difference in our raw pay gap numbers over time. As a starting point, our goal is to increase representation at the Assistant Vice President through Managing Director levels to at least 40% for women globally and 8% for Black employees in the U.S. by the end of 2021.

The bank turned to its HR chief to explain the announcement.

Bloomberg reported:

“The numbers are difficult,” said Sara Wechter, Citigroup’s global head of human resources. “We should obviously be at 100 percent parity, and that’s what we’re striving for.”

The gap reflects a company that’s mostly male at the highest levels. Women make up more than half of Citigroup’s workforce, but only 37 percent of employees at the assistant VP level through the managing director level. Over the years, banks have lost black executives. In 2017, Citigroup saw a drop in black bankers for the eighth consecutive year. Black workers only make up 1.8 percent of executive and senior manager positions, according to data compiled by Bloomberg.

Though some companies may share Citigroup’s employment record, it’s unusual for a company to make such a public announcement. It’s also unusual for companies the talk about unadjusted mean earnings when talking about the pay gap, because most leaders want to explain pay disparity as a function of workplace responsibility rather than gender.

Citigroup wrote in its blog post:

We know we need a comprehensive approach to our diversity initiatives to make the progress we want to see. In addition to the compensation work and representation goals, we have senior level accountability for our representation efforts, and we’re working to continue to increase diversity by focusing on targeted recruitment, development and retention, and improved promotional paths and processes.

We have work to do, but we’re on a path that I’m confident will allow us to make meaningful progress. Already, more than 50% of our colleagues globally are women and more than 45% of our U.S. workforce are minorities; our senior leaders chair our Affinity groups and are accountable for diversity goals; and more than 80% of our colleagues have participated in unconscious bias training. We are proud to be included among the leading companies selected for the 2019 Bloomberg Gender-Equality Index (GEI) released today, which distinguishes companies committed to transparency in gender reporting and advancing women’s equality.

You’ve heard our leaders say it before – to be a high-performing organization, we need a team that is representative of the places where we operate and the clients we serve. Much work is being done to live up to that goal. Citi has a strong record of action on important issues related to diversity, inclusion and equality, which we hope will benefit not only Citi colleagues, but others as well.

The announcement could be a risky move that courts social media backlash, but Citigroup says it doesn’t want to hide.

The Washington Post reported:

Sara Wechter, Citi’s head of human resources, said in an interview that the numbers were “not where they should be,” but that the firm wanted to be transparent with employees and disclosed the number now because of past commitments it had made to workers and to time it with annual compensation announcements.

“We came to the conclusion we have nothing to hide,” she said. “We want to be as transparent as possible to employees about why representation matters. It wasn’t so much about the number; it’s about the message it sends to our employee base.”

Some experts say it’s not a bad move to keep these figures hidden, because announcing them can open your organization to ridicule.

The Washington Post continued:

Brian Levine, a partner at the consulting firm Mercer who works with Citi and other financial services firms, called Citi’s move “bold” but also said it’s not “wrongheaded” to keep such figures private, given the difference that factors like markets, industry and geography can play.

“That Citi is out there will have weight, but whether it sparks a dramatic change in the disclosures of companies is not clear to me,” he said.

The move has given Citigroup a spate of adverse coverage, including this profanity-laced headline from Vanity Fair.

On Twitter, some applauded Citigroup’s transparency:

Some said they were encouraged by the bank’s promise of reform:

Others hoped for a new kind of conversation about gender equality in the workplace:

Others found the report to be misleading:

Many were ready to be angry at the banking group:

It remains to be seen whether other high-profile companies, in the financial sector and beyond, will follow suit and disclose their relative pay levels.

What do you think of Citigroup’s announcement, PR Daily readers?

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