State Street Corp., the $2.6 trillion asset manager that installed the "Fearless Girl" statue on Wall Street, agreed to settle U.S. allegations that it discriminated against hundreds of female executives by paying them less than male colleagues.
The custody bank will pay $5 million to more than 300 women, following a U.S. Department of Labor audit that uncovered the alleged discrepancies, according to a settlement agreement disclosed Wednesday.
The Labor Department alleged that women in senior leadership positions at Boston-based State Street received lower base salaries, bonus pay and total compensation since at least December 2010. The company said it has cooperated fully with the agency and that it disagreed with the findings of the audit, which was done in 2012.
“State Street is committed to equal pay practices and evaluates on an ongoing basis our internal processes to be sure our compensation, hiring and promotions programs are nondiscriminatory,” the company told Bloomberg BNA.
State Street typically calls on other companies to add more women to their boards, especially those that have none. This year, the bank said it has voted against the re-election of the chair or most senior member of a board’s nominating and governance committee at 400 firms with men-only boards. State Street also recently launched its SPDR Gender Diversity exchange-traded fund, which focuses on firms that have greater gender diversity in senior leadership.
Still, more often than not, State Street has voted against gender pay shareholder proposals, according to Fund Votes.
The proposals don’t always reflect progress that companies are making on particular issues and can be “too limited in scope, which can in turn limit their effectiveness,” said Rakhi Kumar, head of ESG investments and asset stewardship at State Street Global Advisors.
“We are taking into account how the organization is holistically approaching diversity based on a number of factors that go well beyond just gender or pay,” Kumar said Friday in an emailed statement. “There are a number of different mechanisms we use to affect change as a long-term index investor, with the most essential being the ongoing dialogue we have with companies on issues, like diversity, we feel are important.”
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