Regulation
State Street to pay $5 million in back pay to settle charges of compensation discrimination
Labor Department charged firm with paying less compensation to female and black employees
State Street Corp. (STT) agreed to pay $5 million to settle U.S. Labor Department charges that it discriminated against top female employees and black vice presidents at its headquarters in Boston by paying them less compensation than top male employees and white employees, respectively.
The Sept. 29 agreement shows that State Street denied the allegations but said it would give back pay totaling $4.5 million and interest totaling $500,000 to 305 female senior vice presidents, managing directors and vice presidents and 15 black vice presidents.
The settlement says the complaint against Street Street is based on a 2012 review by the Department of Labor's Office of Federal Contract Compliance Programs. It said a regression analysis found that between Dec. 1, 2010, and the end of 2011, State Street engaged in the pay disparities.
The settlement says that the regression review found that even accounting for "legitimate factors" that could have affected compensation, the analysis found that there was a "statistically significant disparity" in the base pay, bonus payments and total compensation the female and black employees received.
As part of the agreement, State Street also agreed to conduct a compensation analysis for the next three years for senior vice presidents, managing directors and vice presidents in Boston and forward the data to the Department of Labor for review.
State Street said in an emailed statement that it 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 non-discriminatory. While we disagreed with the OFCCP's analysis and findings, which are based on 2010 and 2011 data in one State Street building, we have cooperated fully with them, and made a decision to bring this six year-old matter to resolution and move forward."
The settlement follows investment subsidiary State Street Global Advisors in March installing on Wall Street a statue called "Fearless Girl," which became a symbol by some of female empowerment and was used to highlight the need for action to increase the number of women on corporate boards.
