Anti-DEI push comes, and progress plateaus

The Trump administration has issued several executive orders aimed at curbing diversity, equity and inclusion in the federal government and at companies, including publicly traded firms. This comes on the heels of certain states introducing and passing anti-DEI legislation. While anti-DEI shareholder proposals have been on the rise, shareholder support for these has remained low. The anti-DEI movement comes as money management firms, while claiming efforts to improve diversity, show women underrepresented in their management ranks.

Plateau in pay incentives: Last year, the percentage of public companies using DEI metrics as part of short-term and long-term pay incentives stayed constant. In 2024, 41% of S&P 500 companies utilized DEI measures, and it was lower for midcap and small-cap companies. Although it's too early in the 2025 proxy season to draw conclusions, ISS-Corporate speculated that companies could alter the DEI metrics.

Money managers embrace DEI recruiting: Most money managers named as Best Places to Work, 101 out of 113, stated that they have strategies to recruit and retain a diverse workforce, according to Pensions & Investments' 13th annual Best Places to Work in Money Management survey. This includes employees of differing races, sexual orientation, ages, and those with disabilities.

Female underrepresentation: Despite diversity efforts, most of the money management firms that broke out their management by gender for P&I's Best Places to Work in Money Management survey had less than 40% of their leadership team consisting of females. This was across various levels of management. At the executive management level (e.g., C-suite, president and EVP), 16 companies had no female representation out of 97 respondents.

Pension plans’ money manager hires: There were 33 large pension plans that stated they had a formal policy to encourage hiring women and minority-owned money manager firms, based on responses to P&I’s most recent annual Top 1,000 plan sponsor survey. The portion remained constant from the previous year when 37 stated they had these policies in place. In 2014, 30 out pension plans made that claim.

Sources: ISS-Corporate, Workforce Research Group, Pensions & Investments