Authors
Mike Corbat
CEO, Citigroup
Earlier this year, Citi decided to be transparent about a statistic I’ve described as “disappointing” and “ugly:” Citi’s unadjusted or “raw” pay gap for women and US minorities, which measures the difference in median total compensation when we don’t adjust for factors including job function, level of seniority, and geography.
Our analysis showed that at Citi, the median pay for women globally is 71 percent of the median for men; the median pay for US minorities is 93 percent of the median for non-minorities.
For us, the data reaffirmed the importance of the goals we announced last year to increase our representation of women and US minorities in senior and higher-paying roles at Citi. That is the only way that we will effectively reduce the difference in our raw pay gap numbers over time. The decision to disclose our raw numbers sent a clear message that we’re willing to confront this challenge head on.
This intensified emphasis on building a culture of diversity and inclusion in the workplace certainly isn’t unique to Citi, nor is it new across the private sector. Businesses have been working hard for decades to address this challenge. Yet, the disappointing reality is that at most companies, the numbers remain stubbornly “disappointing” or “ugly.”
What has changed—for the better—in recent years is the nature of the discussion around these initiatives. There is an increasing commitment to greater transparency, combined with an even greater willingness to admit where we are falling short. At Citi, we’ve pushed ourselves to be comfortable about being uncomfortable with not just the statistics, but also the social and cultural forces that produced them.
We know the value of business strategy. The same principles apply to our people.
What we are doing is becoming increasingly forthright about our data, willing to see where it takes us and what needs to be done to meet our goals. It’s encouraging that many other companies are doing the same, with a greater proportion of those discussions driven by employees who feel increasingly empowered to address these inequities.
On the other hand, another change in the dialogue is concerning not just to me, but to any business leader looking to drive change. Some are raising concerns that increasing the focus on diversity and inclusion runs contrary to the idea of creating a true meritocracy. Those who have long enjoyed privileges associated with being part of the majority, perhaps not surprisingly, question what it means for them if organizations put their focus on advancing women and minorities.
I can see where this line of argument comes from, but let’s look at some telling statistics as we assess its validity. According to the US Department of Education, women have earned more bachelor’s degrees than men since 1982, more master’s degrees since 1987, and more PhDs since 2006. The most recent data from the National Center for Education Statistics shows that women make up 47 percent of individuals receiving graduate business degrees from US business schools. Yet the percentage of women who run Fortune 500 companies declined in 2018 to 4.8 percent, down from only 6.4 percent the year prior. That doesn’t feel like the outcome of a meritocratic system to me.
It benefits no one to have inconsistent standards of evaluation and rewards within the same organization. Nor is it what our female or minority colleagues want or will tolerate. Instead, I believe that we all want a fair and level playing field that rewards the best ideas and hardest work, and an environment that actively seeks out a diversity of perspectives. Diversity allows us to bring all of our talents to bear as an organization. There is an abundance of research available that shows that companies that have diverse teams at senior levels are simply better at sound decision-making, risk mitigation, innovation, and performance. I run a global bank, and we know the value of diversification to our business strategy. The same principles apply to our people.
Businesses have been working hard for decades to address this challenge.
Yet, the disappointing reality is that at most companies, the numbers remain stubbornly disappointing or ugly.
Shared prosperity will not be achieved in the absence of a strong commitment, coming from the top, to equal pay for equal work and equal representation in positions of seniority. It cannot be achieved if our colleagues, no matter their position within an organization, don’t work in an environment where they feel like they belong and are free to contribute their talents to reach their full potential. Shared prosperity requires honesty, transparency, and, at times, discomfort. Shared prosperity means we have to embrace the view that, above all, this is not a zero-sum game.