Resolved clauseRESOLVED: James McRitchie, of CorpGov.net, and other shareholders, request that Kellanova (formerly Kellogg) report annually on unadjusted median pay gaps across race and gender globally and/or by country, where appropriate, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent.
Pay includes base, bonus, and equity compensation, either aggregated or, preferably, disaggregated. The reports should be prepared annually at a reasonable cost, omitting proprietary information, litigation strategy, and legal compliance information.
Racial/gender pay gaps are defined as the difference between non-minority and minority/male and female median earnings expressed as a percentage of non-minority/male and female earnings.
Supporting statementSUPPORTING STATEMENT: Pay inequities persist across race and gender and pose substantial risks to companies and society. Black workers’ median annual earnings represent 77 percent of white wages. The median income for women working full time is 84 percent that of men. Intersecting race, Black women earn 76 percent and Latina women 63 percent1. At the current rate, women will not reach pay equity until 2059, Black women in 2130, and Latina women in 2224.2 At the current rate, women will not reach pay equity until 2059, Black women in 2130, and Latina women in 2224.3
Citigroup estimates closing minority and gender wage gaps 20 years ago could have generated 12 trillion dollars in additional national income.4 PwC estimates closing the gender pay gap could boost Organization for Economic Cooperation and Development (OECD) countries’ economies by $2 trillion annually.5
In 2022, minorities represented 38.1% of Kellogg’s United States workforce and 23.1% of Directors and above. Women represented 35.9% percent of the workforce and 41.2% of Directors and above.6 Actively managing pay equity is associated with improved representation and diversity is linked to superior stock performance and return on equity.7
Best practice pay equity reporting consists of two parts:
1.unadjusted median pay gaps for similar, assessing equal opportunity to high paying roles,
2.statistically adjusted gaps for similar roles, assessing whether minorities and non-minorities, men and women, are paid the same for similar roles.
While Kellanova reports statistically adjusted pay equity, the Company ignores unadjusted pay, which addresses the structural bias women and minorities face regarding job opportunities and pay. Racial and gender unadjusted median pay gaps are accepted as the valid way of measuring pay inequity by the United States Census Bureau, Department of Labor, OECD, and International Labor
Organization.8 The United Kingdom and Ireland mandate disclosure of median gender pay gaps.9 Kellanova does report diversity data. However, unadjusted median pay gaps would show, quite literally, how Kellanova assigns value to its employees through the roles they inhabit and pay they receive. Pay gap reporting provides digestible, comparable data to determine progress over time.
Filed by James McRitchie.