Citi puts pay-equity analysis on hold amid cuts to its workforce

Benjamin Girette/Bloomberg

Citigroup , which has been a leader in reporting pay inequities among its employees, has not yet conducted a pay-gap analysis for 2023, citing ongoing efforts to realign its workforce.

The New York banking giant disclosed Tuesday that it "paused" its annual practice of reviewing racial and gender pay gaps last year due to ongoing "organizational and management simplification initiatives" that have been underway for the past six months.

Citi "looks forward to resuming routine pay equity reviews" once the work of "aligning roles to the new organizational structure" has been completed, the company said in its annual proxy statement.

The $2.4 trillion-asset company has been cutting layers of management and overlapping support roles since last fall. The initial round of restructuring, which will eliminate about 5,000 jobs, is set to be finalized by the end of this month, CEO Jane Fraser said recently at an industry conference.

Citi will conduct an analysis of 2023 pay equity data sometime this year, but the exact timing is unknown, according to a source familiar with the situation.

The pause "doesn't signal any shift away" from the work Citi is doing to close the pay gap, the source said.

Citi broke ground in 2018 when — in the face of investor pressure — it became the first U.S. bank to publicly share the results of a statistically adjusted pay gap review. That analysis compared what women and men, and what U.S. minorities and nonminorities, were paid.

The 2018 analysis found that women in the company were paid on average 99% of what men were paid, while U.S. minorities were paid on average 99% of what nonminorities were paid.

A year later, Citi became one of the first companies to expand its review by also analyzing the unadjusted, or "raw," pay gaps, which measure the difference in median total compensation without adjusting for factors such as role, tenure or geographic location.

Those results were far less flattering, with Citi finding that median pay for women across the company was 71% of that for men. Minority employees received median pay that was 93% of what was paid to nonminorities.

Since 2019, Citi has made improvements. According to a 2022 company report, Citi's adjusted median pay for women globally rose from 74% of what men were paid in 2021 to 78% in 2022. Meanwhile, the unadjusted median pay for U.S. minorities rose from 96% of what nonminorities were paid in 2021 to 97% the following year, the report said.

A growing number of U.S. banks have begun reporting pay gap details in recent years — usually in response to pressure from investors who want more information.

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But banks and other public companies often disclose only the adjusted pay gap. Groups that support pay-gap analyses argue that the unadjusted median pay gap is another data point that's necessary for understanding the full scope of a firm's pay inequities.

Last week, Goldman Sachs disclosed the findings of its initial racial and gender pay equity review, which looked at adjusted pay gaps. For the second consecutive year, some Goldman shareholders are pressing the investment bank to disclose both measures of the pay gap.

In Citi's latest proxy statement, the megabank said that it "values transparency and has taken significant action to provide both managers and colleagues with greater clarity" around its "compensation philosophy." Those efforts include launching market-based salary structures and bonus opportunity guidelines in different countries, as well as posting salary ranges for all U.S. job postings that are open to external candidates.

Citi's recent pay-gap disclosures have garnered praise from shareholder groups that advocate for pay equity.

In Arjuna Capital's inaugural racial and gender pay scorecard, which was released in 2018, Citi received a "C" grade for its pay equity efforts.

It has received an "A" grade ever since.

"Given how much leadership Citi has shown on pay equity, I expect the company will pick up reporting as soon as the [reorganization] is complete," Natasha Lamb, Arjuna's managing partner and portfolio manager, said Wednesday in an email.