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Microsoft and Facebook Tout Equal Pay, but There's Another Issue

Microsoft and Facebook Tout Equal Pay, but There's Another Issue

By Andrea Peterson and Jena McGregor, The Washington Post | Updated: 13 April 2016 10:52 IST

Facebook and Microsoft said they pay men and women virtually the same in announcements made on the eve of Equal Pay Day, which marks how long into the new year women have to keep working to catch up to what men were paid last year.

As is common, the companies are comparing men and women who do the same work.

"Today, for every $1 earned by men, our female employees in the US earn 99.8 cents at the same job title and level," Microsoft's head of human resources, Kathleen Hogan, wrote in a blog post. Facebook's head of human resources, Lori Matloff Goler, made a similar announcement in a post on the social-media network, writing that the company does "thorough statistical analyses to compare the compensation of men and women performing similar work" and that they "earn the same."

Microsoft and Facebook are the latest companies to talk more about gender pay equity after facing pressure from activist shareholders. Boutique investment firm Arjuna Capital has filed proposals with nine tech giants this shareholder season asking them to commit to fighting gender pay gaps and disclose salary information. Several other targets of the campaign, including Apple and Amazon, addressed the issue earlier this year.

And more could decide to come forward. Natasha Lamb, Arjuna's director of equity research and shareholder engagement, says the firm has had interest from other investors who might like to take part in such efforts. Meanwhile, consultants who help companies audit their compensation for pay disparities are seeing increased demand.

Gail Greenfield, a principal at the consulting firm Mercer, said she is getting cold calls from organizations that aren't clients, which she says is unusual. "They're saying, 'My boss said I need to look at this. Can I talk to you immediately?' " Greenfield said. "It was literally like this emergency email."

Companies, especially those that do federal contracting, have long audited their compensation for disparities, Greenfield says. But new regulatory changes, combined with more public attention on the issue, are driving interest. California's recent Fair Pay Act requires that companies be able to prove they pay men and women equally for similar jobs. And earlier this year, President Obama proposed rules that would require larger companies to report salary data based on race, gender and ethnicity to the Equal Employment Opportunity Commission.

Although more companies may be reporting a lack of a gender pay gap, comparing people who perform the same work doesn't tell the full story of how women struggle to get ahead in tech. For one, it ignores a more pernicious problem: the industry's position gap. Men and women may end up earning roughly the same amount in the same jobs, but men are more likely to end up in higher-paying roles in the tech industry.

"It's accurate for what it claims to be - a lack of a pay gap when looking at the same jobs - but it doesn't get at the broader issue of women being underrepresented in these fields and leadership positions that are so crucial for setting the tone for the whole company," said Lisa Maatz, vice president at the American Association of University Women.

Last year, long-running tech career site Dice reported that men were much more likely to hold better-paying tech job titles than women. Average salaries for the top 10 tech positions held by men in 2014 ranged from $92,245 to $127,750; the top 10 roles held by women had average pay of $43,068 to $98,328.

And both Facebook and Microsoft have far fewer women than men in leadership roles. Women make up 23 percent of Facebook's senior leadership, according to its latest diversity report. Microsoft's diversity report shows an even larger gap, with women holding just 17.3 percent of leadership roles.

Meanwhile, Greenfield says, her own experience is that the kind of aggregate percentages these companies are reporting can end up masking pockets in an organization where there are bigger gaps between what men and women earn, even among job titles. In her work with clients, she finds that even after doing a rigorous statistical analysis that accounts for factors such as job categories, levels, experience and location, the overall company figure may be north of 99 percent, but there are places where a wider gap remains.

"It's not that it's not true, but it's not telling the whole story," she says.

(A Facebook spokesperson said in an email that the company's analysis of gender differences in compensation includes job profile, job level and location: "This is widely accepted practice in pay- equity analysis." Microsoft, Apple and Amazon either declined to comment or did not immediately respond to a request for comment.)

Arjuna's Lamb applauds the disclosure by GoDaddy, the domain-name registrar known for its controversial Super Bowl ads, which chose to break out the gender pay gap across levels of the company when it shared its data in October. Across the company, for instance, it found that women are paid 0.28 percent more than men, while in management roles, women are paid 3.58 percent less.

"That's the kind of transparency we're shooting for here," she says.

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