In 2016, several technology companies received or responded to proposals from investors that requested shareholder votes regarding whether the companies should be required to prepare reports addressing their policies and goals to reduce the gender pay gap. This year, shareholder activists are turning their sights on the retail industry, citing concerns with pay gaps across gender and racial lines. According to a January 10, 2017 report in Bloomberg News, pay equity-related shareholder resolutions have been submitted to several major retailers.

Retailers may want to consider taking the following steps now to prepare for a pay gap shareholder proposal or other investor inquiries into the company’s pay parity practices:

  • Review your organization’s compensation data and make a preliminary determination about the company’s level of pay equity.
  • Determine the processes the company would utilize to undertake evaluations of pay equity, and calculate the time and cost of different methodologies needed for compiling and analyzing the data.
  • Review a list of investors and analyze the published reports of how investors respond to pay equity and related shareholder proposals.
  • Prepare a strategy for communicating with investors and other stakeholders.

Attention to crafting a communications plan and pay equity strategy now can enable retailers to respond in a prompt and effective fashion if they are faced with shareholder activism involving pay equity issues.