Report for Morgan Stanley at Work Shows Women Significantly Lag Men in Equity Compensation at Private Companies
Firm’s Transparency 2021: Addressing Gaps in Equity Compensation report highlights how private companies can use equity compensation to create equity parity and opportunity among their workforce
The report also found that the equity compensation gap exists among working women and among Black, Indigenous and People of Color (BIPOC). Of those individuals who were granted equity as part of their compensation, only 25% were working mothers, compared to 60% of working fathers. In addition, only 12% of equity compensation recipients are BIPOC, compared to an average of 42% White plan participants.
“Education on equity compensation, diversity and the value of inclusivity can serve as an important differentiator in equity plan design and as a tool in combating inequalities,” said
In the context of inequalities at work, the way in which equity is administered, and to whom, may unintentionally exacerbate obstacles to achieving equality in the workplace. Even in the presence of equal base pay, equity plans can increase pre-existing disparities. To establish diverse equity compensation participation, the Transparency 2021: Addressing Gaps in Equity Compensation report also highlights five strategies for diverse equity compensation plans.
- Education on Equity is Key: Consider offering routine virtual workshops and seminars, educational articles and content that break down the value of equity, the role it plays in the company and the ways to access the offer. Lack of education was cited as one of the largest reasons that employees do not participate in their equity plan — executives reported that only 50% of their eligible workforce participates in equity.
- Mentorship and Training: Equity plans are often tied to a specific title or job role. Offer a training or mentorship program focused on women, BIPOC and underrepresented minorities to help create a path forward for all employees who seek career growth and advancement opportunities. This is a great investment back into the organization while communicating individual and collective value.
- Objective Metrics for Every Role: To combat inherent biases and potential discrimination, communicate clear metrics for each role that are measurable and transparent to the employee along with regular employee reviews covering progress and areas for improvement.
- Diversity and Inclusion Metrics for Leadership: Incorporate Diversity and Inclusion (D&I) metrics in executive performance goals that are transparent and measurable. This will help to ensure the organization is headed towards an inclusive workforce.
- Examine Plan Design: Consider reviewing existing equity plans to determine alignment with bonus structures and other benefits through the lens of making overall equity compensation plans more equitable. When considering the type of equity compensation plan to implement, look to level the playing field by ensuring accessibility across the board. Survey underrepresented plan participants to identify and remove barriers to achieving the full potential of the plan.
To get a copy of the report, including full results and for more information about Shareworks by
About Transparency 2021: Addressing Gaps in Equity Compensation
The findings are based on a global survey of 574 respondents, which included 272 Executive and 302 Employees in various industries and regions. Criteria for Executives included CEO, CFO, CHRO, DEP or CEP located in the
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