Google Parent Alphabet Gender-Pay Proposal Dead On Arrival

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MOUNTAIN VIEW — A proposal from two investment firms to order Google’s parent firm Alphabet to issue a report on an alleged “gender pay gap” was dead even before it was read out at Wednesday’s annual stockholders meeting.

Earlier proxy voting by investors killed the measure, which was also proposed last year, Alphabet executive chairman Eric Schmidt told the meeting, held at Google’s headquarters in Mountain View.

Six other investor proposals, including three for more transparency over Alphabet’s lobbying, political and charitable contributions and one for a report on the firm’s “failure to effectively manage” fake news, were also nixed by shareholders, who voted in support of the board’s recommendation against all seven proposals.

Support by outside shareholders for any of the measures would not have been enough to approve them if Google co-founders Larry Page and Sergey Brin voted against them, because according to an April 28 company statement to investors, the two control 51 percent of total shareholder voting power.

After Schmidt disclosed the results of the votes, the woman who presented the gender pay proposal on behalf of Arjuna Capital and CB Wealth Generation returned to the microphone during the question period.

“The company’s paid lip service to the gender pay gap … but it’s been unwilling to give a quantitative disclosure,” Natasha Lamb, managing partner at Arjuna, an ideals-driven “impact investing” firm, said to Alphabet executives.

The company’s general counsel, Kent Walker, noted that Alphabet is being sued by the Department of Labor, which is seeking employee-pay data and contact information for workers while alleging “extreme” and widespread underpayment of women at the firm.

“We do believe that we pay equally across genders at the company,” Walker told shareholders at the meeting.

In an interview after the meeting, Lamb said that when her company put the same proposal forward at last year’s gathering, “yes” votes from investors outside the company came to 48 percent of the total. And when her firm pressed nine major tech firms last year to publicly report on their gender-pay gaps, seven — including Amazon, Intel and eBay — did so, Lamb said.

Equal pay for women is crucial for Alphabet’s performance, as a compensation gap can inhibit the ability to attract and retain top talent at a firm that reports only 31 percent female employees and 24 percent in leadership roles, Lamb said.

“More gender-diverse leadership teams … lead to better financial performance,” Lamb said.

However, when looking at a particular company, it’s hard to make a convincing case that a gender pay gap affects performance, said Forrester analyst Frank Gillett.

“I would think that it could be a factor,” Gillett said. “It’s hard to prove.”

Still, Gillett said, a report such as the one Arjuna Capital has requested “sure seems like the right thing to do and it ought to be in shareholders’ interest.”

Alphabet declined to comment on Lamb’s statements. Labor market research firm Glassdoor reported in April that its salary-survey results showed men earn 16 percent more than women at Google for all jobs combined. But when workers with similar jobs and backgrounds are compared, the gender pay gap disappears, Glassdoor reported.

Generally, shareholders follow board recommendations on shareholder proposals, said CFRA Research analyst Scott Kessler.

“More often than not the perception, right or wrong, is that these are things that company management will decide on for the good of a company,” Kessler said.

Also during the question period, advocacy group Consumer Watchdog was silenced after a contentious exchange over the firm’s support of organizations defending alleged sex-trafficking website Backpage.

The group’s John Simpson read a statement from the mother of a girl allegedly trafficked on Backpage. Simpson then asked if Alphabet would stop funding organizations supporting the site’s efforts to remain free from liability over third-party content, and if Alphabet would back a “narrow amendment” to the law that provides that liability shield.

Alphabet’s Walker said his company had funded groups working against sex trafficking, hired staff to work on human rights advocacy and assigned engineers to collaborate with organizations focused on preventing child exploitation.

The third-party shield law “has actually been a great thing” by allowing companies to effectively review their platforms while preserving free speech, Walker said.

Schmidt, after some back and forth with Simpson, shut him down.

“Sir, this is not actually a debate,” Schmidt said.

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