SEC Says Amazon Must Allow Vote on 'Gender Pay Gap' Even If No One's Quite Sure What the Term Means

Amazon says the wage-gap proposal is "vague and misleading" but securities regulators disagreed.



Should shareholders have a say in how companies report on their "gender pay gaps"? The U.S. Securities and Exchange Commission (SEC) says yes, rejecting a request from to avoid shareholder voting on a pay-gap proposal that the tech company calls "vague and misleading."

The pay-gap proposal comes via Arjuna Capital, an arm of the investment firm Baldwin Brothers, on behalf of Amazon shareholders Michael and Margherita Baldwin. In 2015, Arjuna asked Amazon and eight other tech companies to hold shareholder votes on whether the companies should report "the percentage pay gap between male and female employees, policies to address that gap, and quantitative reduction targets."

"It's not simply a social justice issue," said Natasha Lamb, director of shareholder engagement at Arjuna, to Reuters. "It's an issue that affects performance, affects the company's ability to attract and retain top talent."

The Arjuna proposal explains that "the gender pay gap is defined as the difference between male and female earnings expressed as a percentage of male earnings according to the Organization for Economic Cooperation and Development" (OECD).

But Amazon sought permission from the SEC to omit the proposal from shareholder voting. In a January letter, it complained that the proposal offered no instruction on how to calculate the pay gap and claimed that "neither shareholders nor [Amazon] can determine what action the Proposal requires, rendering the Proposal impermissibly vague and misleading." Arjuna's letter referenced the OECD definition, but OECD offers multiple ways of calculating the gender pay gap.

OECD's "definitions and sources" file "contains a list of the 43 definitions of 'earnings' OECD 'used for the calculation of the gender pay gap in,'" noted Amazon. "The Proposal gives no indication of how earnings should be calculated for purposes of the requested report. Among other things, the Proposal makes no mention of whether the gender pay gap is calculated based on median earnings or mean average earnings, whether earnings are calculated based only on full-time employees or full-time/full year employees, or whether part-time employees should be included (and if so, whether their earnings should be converted to a full-time equivalent basis). Finally, the Proposal gives no indication of which of the various definitions of earnings used by the OECD is to be applied."

"Different calculation methods for determining 'earnings' could show significantly different results," it continued. "Thus, by referring to a third-party standard for reporting on the gender pay gap, a central and critical aspect of the Proposal, but failing to adequately describe the standard, and in fact misleadingly suggesting that there is a single, clearly understood OECD standard, the Proposal is impermissibly vague and misleading."

Arjuna responded that "the current proposal does not incorrectly describe any standards because it does not point to any set of standards to implement the proposal." The gender pay gap, "defined or not, is a commonly understood and significant social policy issue and a topic on which shareholder are equip to weigh in," it argued to the SEC. "The [OECD] definition is simply included to prevent an argument by the Company that the Proposal is vague or indefinite."

In a March 15 response, the SEC told Amazon that it may not omit the proposal from proxy materials and a shareholder vote. SEC Attorney-Adviser Ryan J. Adams stated that the SEC was "unable to conclude that the proposal is so inherently vague or indefinite that neither the shareholders voting on the proposal, nor the company in implementing the proposal, would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires."

NEXT: FBI Warns About Car Hacking. Encryption Security Helps Prevent That.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Should shareholders have a say in how companies report on their “gender pay gaps?”

    Yes, by majority vote. But somehow I doubt that’s what this is.

  2. I’ll take the gender pay gap a bit more seriously when the media takes the 13 to 1 gender death gap seriously.

    1. “Equal pay day” for 2016 will fall on April 12. “Equal occupational fatality day” will fall on April 17?2023.

      You have a lot of catching up to do, ladies.

    2. I thought the death rate was 100% for each sex.

    3. 13 on the Job male deaths to every one female death on the job? Where are your stats from (not challenging, just curious).

      1. Scratch that. Thanks for the link commodious.

    4. So 1 woman = 13 men, and therefore should earn 13 times as much.

      /SJW Mathematician

  3. Law firm partners around the country rejoice.

    1. Yep. “”It’s not simply a social justice issue,”

      It’s a make work for lawyers issue.

      Except that there’s no way this will pass the vote. I’m guessing 90% of the votes are proxy.

      1. I’ve always hated that. Either let me vote the shares held in my account in my name, or make them non-voting as long as they are held in proxy. Too many cozy pension funds wanting ‘access’ are rubber stamping poor corp governance.

        1. You never which of the big blocks of proxies will decide to curry favor with the SJWs.

          “the percentage pay gap between male and female employees, policies to address that gap, and quantitative reduction targets.”

          I would load the report with “adjustments” for things like years of service in-company, years of service total, years of service in the same or a similar position, education (with further adjustments for the “quality” of the terminal degree, etc.), etc. etc.

          I would also only report on gaps between (very) similar employees. What they want is “all men earn X, all women earn X minus”. So don’t give them that. Give a highly stratified, highly adjusted report, let them complain about it, make minor tweaks for the next year, let them complain about it, ad infinitum.

  4. easiest fix is for all the male employees identify as female. boom, pay gap eliminated. with a side of free Obamacare rubbers.

    1. You really want to entrust something as important as rubber quality to the government?

      1. FWIW, The only condom I’ve ever had break was provided to my then-girlfriend by Planned Parenthood.

  5. “It’s not simply a social justice issue,” said Natasha Lamb, director of shareholder engagement at Arjuna, to Reuters. “It’s an issue that affects performance, affects the company’s ability to attract and retain top talent.”

    I know this is coming from Arjuna, but since the SEC is doing Arjuna’s bidding, is it in the government’s interest– or within the SEC’s mission– to be sure American companies are attracting and retaining top talent?

      1. I understand, but is this a technical issue where shareholders can demand a proposal, and the SEC can rule on whether the proposal is valid? Ie, does the SEC NOT care about gender pay gap but about procedure?

        1. This sounds like it is outside the scope of what minority shareholders would normally be able to demand.

          Reading the rules now.

          1. Well then ok… upon further reflection, it sounds like if that is in fact the case, the SEC is social engineering here.

            1. Yes. As an unaccountable bureaucracy, they do that sort of thing.

    1. Amazon women on the move.

  6. The gender pay gap, “defined or not, is a commonly understood and significant social policy issue and a topic on which shareholder are equip to weigh in,” it argued to the SEC.

    Whoa. Read that statement carefully and then realize that you could be fined or sanctioned for misinterpreting what is “commonly understood” but not defined.

    1. Ignorance of commonly understood social policy is not an excuse.


    2. Oh, c’mon, “commonly understood” is like “reasonable” – so easy to define that, heck, any random group of twelve jurors at your trial will be able to determine what it means.

    3. I see two stolen bases here.

      (1) Just because the shareholders are equipped to weigh in, doesn’t mean the company has a duty to report or mitigate.

      (2) Just because something is a social policy issue doesn’t mean it is something that the company has any duty to address.

  7. “It’s not simply a social justice issue,”

    Correct. It doesn’t even rise to that level of inanity.

  8. Question (I know nothing of this kinda business stuff) : Anytime some shareholders petition a company to make some sort of vote, the company has to get permission from the SEC to refuse, is that right or is there more to this?

      1. Mary Jo White made her career in NY prosecuting terrorists and the mafia.

        I suspect that the “corporate social responsibility” mob wont twist her arm quite so easily.

        1. Kochporatoins are like terrorists and the mafia.

  9. “Pay gap” …. for men vs women in the same jobs?

    or are they asking for average annual compensation by ALL men vs women in the company?

    Which is just a backdoor way of accusing Amazon of not hiring enough women in the ‘top paying’ roles.

    I think this sort of shareholder-social-engineering is of dubious value, and one that other institutional investors and individual shareholders should (and will) reject. However, i wouldn’t be surprised if the SocJus types simply plan to use that rejection as an opportunity to slander others as being insufficiently pro-Victim.

    1. In the real world, no two people do the “same job”. But of course they know this.

    2. I think that’s what Amazon is arguing.

      Method one: Divide all the dudes from the bitches into columns, add up pay, do the columns have a pay gap?

      Method two: Divide all dudes and bitches into columns by job type, add up pay, do the columns have a pay gap?

      Method three: Divide all dudes and bitches into columns by job type, then control for factors like experience, length of time with company, etc. Quantify. Do the columns have a pay gap?

      And so on.

    3. The request is so ambiguous that you can interpret it any way you want. See my suggestion above for a completely useless report.

  10. Damn Ms. (?) Brown, how do you pump out all these articles everyday? It’s pretty impressive.

    1. Need a delete button over here boss! I now regret making this petty attempt at small talk.

      1. There is no delete button on the internet.

  11. SJWs always play that game: keep the definitions as vague as possible, so that no matter what you do you’re always in the wrong and they can pour some more coal on that Outrage Fire.

    1. But ambiguity cuts both ways. Just as they can argue you are wrong, you can argue you are right and gave them what they asked for.

  12. Bunch of rookies. When the guidance is vague, you gin up some numbers that show how much you rock.

    Alternatively, make sure your calculation of the final pay gap is lower than the gap of the Hillary Clinton and Bernie Sanders campaigns and be sure to call that out in your annual report.

    1. “We note as an aside that even the President’s staff exhibits a so-called gender pay gap, and one that is apparently larger than ours. We regard this as an indication that there may be factors at work here that nobody, not even the President, can account for or correct for.”…..story.html

  13. dont forget the ‘police violence gender Gap’

    We shoot men over 9 times as often as women

    It’s rampant institutionalised sexism … And it has to stop

    Every young girl should look forward to a day where she can be assured that a jacketed hollow point will not fail to penetrate her flesh just because she so happens to have different chromosomes from a man

  14. I thought we were doing away with gender? How will we tell who isn’t getting paid enough than?

    In other news Carl’s JR CEO stated that he wants to replace all employees with Kiosks. I welcome our new robot food givers.

  15. I have no knowledge of Amazon’s corporate structure, but as a rule, the executive officers of the company usually hold enough shares to thwart just about any outside shareholder venture. Even one investment firm is unlikely to hold enough common stock of a company to force something through if management doesn’t want it (for good or ill).

    1. Insiders only hold 18%. But kind of a moot point presuming the board recommends rejecting the proposal. The vast bulk of the institutional shareholders are not going to ever vote on a proposal the board disapproves of. And this is a stupid fucking proposal, so even less of a chance.

  16. I had heard of SJWs before, but this proposal comes across as being concerned that there might be social injustice with no real evidence. Arjuna Capital, I dub thee Social Justice Worriers.

  17. Step 1. Pay everyone in bitcoin.
    Step 2. Enjoy overabundance of liberty.

    Once decentralized cryptocurrencies/contracts take off Amazon won’t have to hire any women, will be able to demonstrate with full faith and trust that it’s staffed entirely by women, and no one will be able to know if they even have employees. Blockchain!

Please to post comments

Comments are closed.