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A corporation’s annual stockholder meeting rarely holds much interest beyond the circle of people investing in the company. But a letter sent by the board of chip-making giant Intel to its shareholders this month raised enough eyebrows that somebody forwarded it along to WW.
That’s because of two reports requested by Intel stockholders: one on the median pay gap at Intel based on gender and race, and a report on whether formal company policies or unwritten norms promote a racist culture.
The Intel board suggested other shareholders reject commissioning either report.
That’s a noteworthy recommendation from the board of directors at the largest private employer in Oregon, with nearly 21,000 workers.
Intel, headquartered in California, launched a 10-year “corporate responsibility strategy” in 2020 that addressed how the company would approach and advance environmental sustainability, inclusivity and corporate responsibility. Part of that plan aims to increase the number of minority and female leadership positions.
In its 2021 report to shareholders, the company highlighted its pledge of $1 million to anti-racism nonprofits. (That’s 0.0128% of Intel’s $77.9 billion in revenue in 2020.)
In response to an inquiry from WW, Intel spokeswoman Nancy Sanchez said the board recommended against the reports because they were duplicative. “They were unnecessary,” she said, “as the issues were already being addressed by existing initiatives.”
WW contacted five of Intel’s biggest shareholders. None of the five companies, all national or international investment companies, offered comment. A spokeswoman for the Vanguard Group—which owns nearly 8% of Intel’s shares—declined to comment on the investment company’s position on the proposals, but pointed WW to a document outlining its expectations for boards and diversity disclosures—much of which closely mirrors the proposals on the ballot.
Elizabeth Inayoshi, a former 30-year employee of Intel who’s now an employment lawyer, is critical of the company’s hiring practices. She says the shareholders essentially requested an audit: “The proposal seems to ask almost for an audit of their existing programs, and it never hurts to have an outside look, because talking to yourself is always an uninformative conversation,” she says. “Whatever they’re doing, it clearly hasn’t brought any real change to the corporation.”
Here are the two proposals facing shareholders and the rationale Intel’s board offered in meeting materials for rejecting them.
Proposal 1: “Stockholder proposal requesting a report on median pay gaps across race and gender, if properly presented at the meeting.”
Board recommendation:
• “Intel is committed to providing pay equity fairness and opportunity across all employees, to maintaining a high level of transparency in our diversity, inclusion, representation and pay equity data, and to promoting women and underrepresented minorities into senior leadership roles.
• “The methodology we use for identifying and closing pay equity gaps is more effective for driving accountability and action than the methodology requested by the proposal.
• “Our existing pay equity disclosures, detailed representation data, and robust discussion of our public goals and internal programs to promote gender and racial/ethnic equality at Intel provide the data needed to assess equal opportunity to high paying roles.
• “We have already achieved gender pay equity across our worldwide workforce, and Intel continues to maintain racial/ethnic pay equity in the U.S.
• “We already provide detailed reporting on the representation of our workforce by job level for gender globally and race/ethnicity in the U.S., including the public release of the EEO-1 survey pay data; in contrast, the additional statistics requested by this proposal would not reflect legitimate factors that can affect the data, such as job location and tenure, and would not provide greater insight into opportunities for high-paying jobs than our EEO-1 data and other reports provide.”
Proposal 2: “Stockholder proposal requesting a report on whether written policies or unwritten norms at the company reinforce racism in company culture, if properly presented at the meeting.”
Board recommendation: “The Board recommends a vote against this proposal given the company’s existing programs and policies to: foster a culture of diversity and inclusion; integrate non-discrimination measures across our performance management systems, compensation programs, and hiring processes; publish ambitious long-term goals and lead industry-wide inclusion and social equity initiatives; and transparently report our progress and data to drive accountability and encourage actions by others.”