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Leading Gender Equity Transformation in Executive and Equity Compensation

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August 20, 2020 | Jennifer Namazi

Leading Gender Equity Transformation in Executive and Equity Compensation


Transforming the gaps that exist in gender equity is rapidly becoming a priority for many organizations. Fueled by employees, shareholders, customers, boards, and other influences on the company, employers are faced with the reality that change must happen to normalize policies, compensation, and opportunity across genders.

Driving gender equality in pay is not just about equalizing base compensation. A company may initially take this view, only to learn down the road that true equality of pay is only achieved when inclusive of cumulative compensation, which includes equity.

I recently caught up with some of our members as they shared ideas and experiences in transforming the gaps in gender equity. Emily Cervino of Fidelity, Bharathi Shivakumar of 2U, Sebastian Skalany of Sysco, and Elena Thomas of OptionTrax offer key considerations, a process, and best practices for companies to leverage in their approach to transformation.   


What We Know About Gender and Equity Compensation

In exploring the path to transformation, it’s important to understand the current status of gender in the context of participant equity holdings.

Engagement gaps aren’t always what they seem. Emily Cervino shares recent Fidelity research on participant engagement indicators and reports that although broad views of data may appear to indicate engagement differences when it comes to gender (women seemingly appear less engaged), those differences are often wiped out upon deeper examination using an apples to apples comparison, like size of assets or grants.

Gaps in education and confidence do exist. Cervino also reveals that women cite far less understanding of their equity awards, have greater interest in education, and lack confidence in financial acumen more than their male counterparts.

Men receive more equity compensation. As a whole, option grants are heavily weighted towards men, and they also receive larger sized RSU awards than women. Elena Thomas concurs, and points out that while the nuances of these differences can vary across industry and other demographics, the overall reality is that the gender gap is real when it comes to equity compensation.


How Companies are Driving Transformation

Sebastian Skalany (Sysco) describes the road to transformation as no single “ah-ha” moment, but rather a bubbling up of questions and interest from several different stakeholders, triggering a realization that the company needed to take proactive action. Bharathi Shivakumar (2U) relates an extremely diverse leadership team and board who are strong advocates for equality.

 
3 Success Factors

Undergoing transformation is a large-scale task, one that needs to contemplate the entire organization. Three factors will ultimately make or break the company’s attempts to transform gender gaps.
 

  • A top-down vision and direction

  • Bottom-up performance improvements

  • New processes that cut across functions

 
Transformation: Step-by-Step

A repeated theme in talking with these members about the equity gender gap transformation is the need for transparency throughout a transformative process. As Cervino points out, guidelines are common, but leadership needs to be more transparent.

There are 6 key steps to include in a transformation process:
 

  • Rationale and Direction Setting

  • Metric Process and Design

  • Performance Improvement

  • Organizational Alignment

  • Measurement

  • Feedback

Spoiler: These steps will be explored in depth by Cervino, Skalany, Shivakumar, and Thomas at #NASPPVirtual next month.


A Phased Approach, Not One-and-Done

Transforming equity in compensation across gender is a necessary objective. The key is in the word transformation – this is a deep, lengthy process that will take time, effort and resources. One that is vital to driving equality and overcoming long-standing gaps. It won’t be done in a day, it won’t be a one-and-done moment. Transformation is about planning and progress, measuring impact of changes and making adjustments. Companies should prepare for this, and communicate with employees about their commitment to the process – one that will continue to evolve and improve.

 
Learn More from these Members at #NASPPVirtual

All of these insights, including a detailed look at the process steps for a successful transformation, will be explored in detail at the upcoming Virtual NASPP Conference (#NASPPVirtual) in the session “Leading Gender Equity Transformation in Executive and Equity Compensation.” The presentation features Emily Cervino of Fidelity, Bharathi Shivakumar of 2U, Sebastian Skalany of Sysco, and Elena Thomas of OptionTrax. To attend this session and more, visit our conference page.


About #NASPPVirtual

With 60+ sessions across stock plan domains, exciting keynotes, and plenty of interactive opportunities, NASPP Virtual is the must-attend equity event of the year. No need for FOMO (fear of missing out) over a session - a huge perk this year is that all sessions will be available on-demand through the end of September. You can attend the entire conference (binge watch in your pajamas if you want) or pick and choose what works best for you. I can’t wait to see you (online) there!

About Us

The National Association of Stock Plan Professionals is the largest and oldest professional association for the stock and executive compensation community, with over two decades of leadership providing expert resources, education and other benefits for our more than 6,000 members across 32 affiliated chapters.

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