While professing BLM support, Wall Street banks reject racial equity audits
But instead of embracing the idea of the audit, all but one bank urged shareholders to reject the proposals.
How did the shareholders react? So far, four of the seven banks (Bank of America, Wells Fargo, Citigroup, and Goldman Sachs) have held their annual meetings. And although none of the audit proposals received majority votes, significant minorities supported the idea, pressuring management to take note.
A 38% “yes” vote to Citi was particularly encouraging, given that institutional investors generally follow the recommendation of the board. JPMorgan Chase and State Street shareholders are holding their meetings this week. CtW dropped Morgan Stanley’s proposal after the bank agreed to conduct a racial equity audit.
Why have almost all banks urged to vote ‘no’ on audit proposals? In documents filed with the SEC, the banks argued that such an analysis was not necessary given the huge strides they are already making on race equity.
“Performing a racial equity audit at this stage would not provide us with any additional useful information,” says the JPMorgan proxy statement. “We believe our shareholders would be best served by the company’s vigilance in leveraging current momentum to maintain a culture of respect and inclusion and advance racial equity.”
That same proxy revealed that JPMorgan CEO Jamie Dimon earned $ 32 million in compensation last year. Like the CEOs of the seven banks in 2020, Dimon is a white man. (Jane Fraser, a white woman, took over as CEO of Citi in February 2021.)
In the financial sector, the upper echelons are predominantly white. At the top five U.S. investment banks, the share of executives and senior executives who are white ranges from 71 to 83 percent. (JPMorgan Chase: 81%, Goldman Sachs: 77%, Bank of America: 81%, Morgan Stanley: 83%and Citigroup: 71%)
Across the country, employees in the lucrative securities industry 80.5 percent white, 5.8% black, 11.5% Asian, and 8.1% Latin. The average salary in this industry (including bonuses) was almost $ 600,000 in 2019. In contrast, whites represent 55.4 percent people in jobs that pay less than $ 15 an hour.
In a letter to JPMorgan CEO Dimon, the groups Transform Finance, Activest, Worth Rises, the Action Center on Race and the Economy (ACRE), the Institute for Policy Studies and the Public Accountability Initiative have joined other racial justice organizations to support racial equity. audit proposal before JPMorgan, requiring “a commitment to long-term tangible change”.
“Without a thorough investigation of the impact of institutionalized racism on the policies and business practices of these banks,” IPS Bayard says, “all of their public equity commitments will be empty promises.”