Pressure Increases for More Tech Firms to Tie C-Suite Exec Bonuses to Diversity Goals
There is no shortage of criticism over Silicon Valley’s abysmal attempts at diversifying the tech industry. Even people of color with STEM degrees remain woefully underrepresented in tech jobs.
There have been calls from organizations focused on socially responsible investing to tie tech company executives’ compensation with the company’s diversity goals.
OpenMic.org, a non-profit organization using shareholder engagement to forward diversity in media and telecommunication, works with socially conscious investment firms to create shareholder proposals holding tech CEOs more accountable for diversity progress.
Apple Is a Frequent Target
A recent proposal filed by Zevin Asset Management requests that Apple integrate “sustainability metrics, including metrics regarding diversity among senior executives, into the performance measures of the CEO under the Company’s compensation incentive plans.”
“The tech sector faces a diversity and inclusion crisis,” said Pat Miguel Tomaino, associate director of socially responsible investing at Zevin Asset Management, via a released statement.
“Investors need to know that Apple has what it takes to recruit and retain talented and diverse workers. C-suite accountability is a critical step.”
These investment firms argue that diversity is good for business and that their clients make more money when companies in which they are invested are more diverse.
Apple filed a letter with the SEC requesting permission to reject the proposal. The City of Cupertino’s argument is that the same proposal was filed and also rejected two times prior.
Indeed, earlier this year, Zevin Asset Management filed a shareholder proposal surrounding the lack of diversity on Apple’s executive team and board. It was also rejected.
Some Tech Companies Already Holding Executives Accountable
Apple has launched several diversity initiatives within the company. For example, for the last three years, the company has released its diversity data.
Cupertino also hosts an Immersion Experience program through its partnership with the Thurgood Marshall College Fund (TMCF). The program prepares HBCU students for internships with Apple. Apple also announced a $40 million donation to the TMCF.
Yet, other tech companies have also launched internal diversity and inclusion efforts, and have taken the further step of associating executive compensation with diversity.
Last year, Microsoft announced that its executives’ bonuses would be determined on whether that executive’s team met its diversity goals.
In 2015, Intel CEO Brian Krzanich announced the company’s $300 million commitment to diversity and that diverse hiring goals are taken into account for annual performance bonuses for every employee in the company.