Pearl Meyer Survey Indicates Companies are Preparing to Talk About Gender Pay Practices with Their Workforce

NEW YORK—Aug 23, 2018—Pearl Meyer has published a new survey on compensation communication which indicates 62% of respondents are or expect to be fielding questions from their employees on gender pay equity. This is in contrast to 91% of companies who note they are not getting questions from their workforce about the highly publicized CEO Pay Ratio disclosure.

The survey, Pearl Meyer On Point: Communicating Compensation, also reveals that employee understanding of corporate pay practices is generally mediocre and just 8% of respondents believe the quality of their organization’s pay communication is “excellent.”

“What we learned from respondents is that there is so much room for improving the way we talk about pay,” said Sharon Podstupka, principal and compensation communication expert at Pearl Meyer. “It is a topic that is highly charged emotionally and has the potential to dramatically affect corporate culture and morale. For that reason, we suggest boards and management teams should fully understand which pay issues are of real concern to their employees and commit to improving the processes around pay communication, as well as delivering clear messages about their organization’s compensation philosophy.”

Additional Key Findings:

• In the last two years, almost half of the companies surveyed (48%) have increased compensation communication, yet a majority of companies (52%) are not sharing information about base salary ranges with all employees.
• About two-thirds of managers are trained to have formal compensation conversations with their direct reports, but the majority (70%) of those surveyed believe those conversations are not effective.
• Less than a quarter of respondents believe employees can appropriately compare their compensation to colleagues (21%) or compare their compensation to similar positions in other organizations (22%).
• Of the 62% who are or expect to receive questions about gender pay equity, a majority have clear and detailed information ready to share or are currently drafting their responses.

“The debate surrounding gender pay parity is not new,” said Beth Florin, managing director and head of the firm’s Survey and Employee Compensation Practice. “However, we are all experiencing a renewed focus on the issue this year, and it’s clear from this survey that companies are hearing and anticipating questions. We suggest it will benefit organizations and their employees to accurately assess the company’s actual position and then base communication around a common set of key terms, definitions, and important contextual background information.” 

About the Survey

Pearl Meyer conducted the online survey in June 2018 and gathered responses from 244 directors and company leaders of public (55%), private (35%), and not-for-profit (11%) organizations across multiple industries. The bulk of responding companies indicate revenue (or assets, in the case of financial organizations) between $300 million and $10 billion. An executive summary of Pearl Meyer On Point: Communicating Compensation is available here. For information about purchasing the complete data set of this or other Pearl Meyer surveys, please visit http://store.pearlmeyer.com.

Additional Resources

• Register here for the upcoming National Association of Corporate Directors (NACD) webcast “#Youtoo: What Boards Need to Know and Do About Gender Pay Equity”
• Learn more about Pearl Meyer’s Executive Compensation Communication Advisory Services
• Read Sharon Podstupka’s blog on Communicating Your Equity Incentive Plan
• Get information on Pearl Meyer’s Employee Compensation Consulting services

About Pearl Meyer

Pearl Meyer is the leading advisor to boards and senior management on the alignment of executive compensation with business and leadership strategy, making pay programs a powerful catalyst for value creation and competitive advantage. Pearl Meyer’s global clients stand at the forefront of their industries and range from emerging high-growth, not-for-profit, and private companies to the Fortune 500 and FTSE 350. The firm has offices in New York, Atlanta, Boston, Charlotte, Chicago, Houston, London, Los Angeles, and San Jose.