On March 7th, 2017, a statue mysteriously appeared in front of the iconic Wall Street “Charging Bull” on the intersection of Broadway and State Street. The bronze statue depicts a young girl with a height of 36 inches, hands on her hips with her head held high, staring down the famous symbol we’ve long associated with the animal spirits and the capitalistic nature of Wall Street. It was almost as if this statue was challenging something. Looking “fearless” as one would say.As such, the idea of “Fearless Girl” came to mind.
The company behind the statue, State Street Global Advisors (SSgA), is a Boston-based investment management division of State Street Corporation, which is the third largest asset manager in the world with over $2.4 Trillion in Assets under Management (AUM). The firm commissioned the statue to advertise an index fund which consists of companies committed principles of gender diversity, which a higher percentage of women among their senior leadership.
It’s also no coincidence that the statue was installed the night before International Women’s Day, the symbol imprints a message about workplace gender diversity, encouraging more companies to recruit women to their executive boards. The plaque below the statue (which was since removed), “Know the power of women in leadership, SHE makes a difference.”
A noble message; unfortunately, these days its far more important to present the perception of moral superiority and altruism than to actually implement the change you’d like to see in the world. There is a word for this, and this word has gotten a lot of traction as of late. It’s referred to as “Virtue-Signalling.”
The following document details the settlement between the United States Department of Labor and State Street, as the firm is about to pay a $5 million dollar settlement over allegations that it paid female employees less than their male counterparts. Apparently, according to the DOL findings, these pay disparities has dated back as 2010: 7 years!
The Office of Federal Contract Compliance Programs also conducted analysis that demonstrates that statistically significant disparity in compensation occurred even when legitimate factors affecting pay were taken into account.
It should be noted that settlements themselves are not evidence of guilt; nor is it proof that wrongdoing never occurred. All it means it the company will address the grievances of the plaintiffs (the employees who were allegedly victims of discrimination). In return, the firm is able to admit no wrong-doing ever occurred.
Also, for what it’s worth, the bank has denied the allegations.
“State Street is committed to equal pay practices and evaluates on an ongoing basis our internal processes to be sure our compensation, hiring and promotions programs are nondiscriminatory,” a spokesperson said. “While we disagreed with the OFCCP’s analysis and findings, we have cooperated fully with them, and made a decision to bring this six-year-old matter to resolution and move forward.”
Sure, it’s easy to claim that way the bank is doing is engaging in hypocrisy. It’s also worth noting that just because the firm has fallen short on it’s “principles” doesn’t mean it’s principles aren’t worth upholding. However, based on its recent controversy and based on the issue of gender pay disparity, we can say is that not everything is always as it seems. The concept of “Fearless Girl” may not necessarily be a shortfall of principles (whatever those might be). It’s probably much more simpler than that: a marketing ploy designed to attract suckers into investing in their financial products.
Meanwhile, the SPDR Gender Diversity Index ETF is under-preforming its benchmark, the SPDR S&P500 ETF Trust by 5.24%. Happy Investing!
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