Men and women are unevenly participating in equity compensation plans among private employers, according to new research conducted in the U.S. by Morgan Stanley.
The investment bank and financial service company found only 41 per cent of women participated in these plans, compared to 52 per cent of men. And of those individuals who were granted equity as part of their compensation, 25 per cent were working mothers, compared to 60 per cent of working fathers. Additionally, of those in a vice-president or director-level role who received four per cent or more of compensation in equity, only 27 per cent were women, compared to 42 per cent of men in the same role.
While men who reported an annual salary of less than US$40,000 also received two per cent or more in equity compensation, 55 per cent of women who earned the same reported two per cent or less in equity compensation. Of those who reported an annual salary between $41,000 and $55,000 combined with equity compensation, 54 per cent were men compared to 44 per cent women. In addition, only 12 per cent of equity compensation recipients identify as Black, Indigenous or a person of colour (BIPOC), compared to an average of 42 per cent of plan participants who identify as white.
The report found a lack of education was one of the main reasons employees don’t participate in equity plans, with executives reporting that only 50 per cent of their eligible workforce participates. It recommended employers offer training or mentorship program focused on women, BIPOC and underrepresented minorities to increase participation, as well as the incorporation of measurable diversity, equity and inclusion metrics in executive performance goals.
The report also suggested companies consider a review of existing equity plans to determine alignment with bonus structures and other benefits, with the goal of making overall equity compensation plans more equitable.