MARRIOTT INTERNATIONAL, INC. | Report on Costs of Low Wages at Marriott International

Status
9.73% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
MAR
Lead filer
The Shareholder Commons
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Diversity, equity & inclusion (DEI)
  • Remuneration or pay
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Shareholders ask that the board commission and publish a report on whether the Company
participates in compensation and workforce practices that prioritize Company financial performance over the economic and social costs and risks created by inequality and racial and gender disparities and the manner in which any such costs and risks threaten returns of diversified shareholders who rely on a stable and productive economy.
Supporting statement
PAY IS INADEQUATE, UNEQUAL AND RACIALLY DISPARATE

• The Company’s starting wage for a housekeeper is $12.00 per hour1 and the average wage for the
position is $13.11.2 By comparison, the national wage adequate for a modest one-bedroom
accommodation is $20.40.
• In 2019, the Company CEO received compensation worth $13,435,887—346 times the
compensation of the Company’s median worker.
• While the Company’s U.S. workforce is 67 percent people of color, those groups make up only 21 percent of Company executives.

RESEARCH REVEALS THAT INEQUALITY AND RACIAL DISPARITY HARM THE ENTIRE ECONOMY

• Income inequality slows U.S. economic growth by reducing demand by 2 to 4 percent.
• A 1 percent increase in inequality leads to a 1.1 percent per capita GDP loss.
• Gender and racial gaps created $2.9 trillion in losses to U.S. GDP in 2019.
• Eliminating racial disparity would add $5 trillion to the U.S. economy over the next five years.

THE COMPANY’S DIVERSIFIED SHAREHOLDERS ARE ECONOMICALLY THREATENED BY INCREASED INEQUALITY AND RACIAL DISPARITY

The reduction in economic productivity caused by inequality and racial disparity directly reduces returns on diversified portfolios, and creates serious social costs that further threaten financial markets. For example, excessive inequality can erode social cohesion and heighten political polarization, leading to social instability.10 It also increases health costs and decreases the value of human capital, through links to more chronic health conditions developed earlier in life.

The Company has presumably chosen a wage structure that managers believe will increase margins and financial performance. But any gain in Company profit that comes at the expense of society and the economy is a bad trade for most Company shareholders, who are diversified and rely on broad economic growth to achieve their financial objectives. The costs and risks created by inequality and racial disparity will directly reduce long-term diversified portfolio returns.

This proposal asks the Board to commission a report that analyzes the tradeoffs the Company makes between financial return and the global economy and cohesion, and how those trade-offs affect diversified shareholders. Such a report would not require precision: identifying areas where the Company creates inequality and racial disparity and analyzing how they might manifest as costs or risks to diversified portfolios would help determine whether and when the Company should prioritize employee equality and welfare over financial returns

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
LocalTapiola Asset Management Ltd For A vote FOR this proposal is warranted, as additional disclosure on the socioeconomic costs of low wages and inequality, as well as their effect on the economy and diversified shareholders would enable shareholders to understand and assess how the company is managing related risks.
Kutxabank Gestion SGIIC SAU. Against

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