Arjuna Capital: A Majority of Kroger’s Investors Vote for Racial & Gender Pay Equity Proposal at Annual Meeting

CEO McMullen responds directly to Kroger workers' pay equity concerns but fails to commit to disclosing pay equity report.

BOSTON--(BUSINESS WIRE)--A 51% majority of Kroger’s shareholders approved a shareholder proposal today asking the company to transparently report on racial and gender pay gaps. The proposal was brought forth by investment management firm Arjuna Capital and cofiler Proxy Impact, with support from union UFCW 3000. While an increasing number of peer companies including Target, Lowe’s, and Home Depot have committed to reporting on pay equity, Kroger’s board opposed the racial and gender pay equity proposal. Today’s shareholder vote signaled the importance of reporting pay gaps to hold companies accountable to their stated diversity and inclusion goals.

The proposal was presented during today’s annual meeting by frontline Kroger worker Sam Dancy, a 30+-year veteran of QFC- a Kroger bannered store in West Seattle, WA- and an elected Executive board member of UFCW 3000’s union. Sam stated:

“As a Black man growing up in America I experienced slurs, prejudices, and racism from an early age. And unfortunately, I have reason to think that this racism has pervaded the culture at Kroger too. I believe Kroger needs to resolve pay inequities connected to race and gender. While my opinion is based on decades of experience mostly at a single store, Proposal 8 seeks transparency, so the issue is addressed company-wide.”

Kroger CEO Rodney McMullen responded directly to Sam’s statement by condemning the discrimination he has experienced at the Company. However, McMullen did not respond to the majority vote and did not make a commitment to fulfill the request of the proposal. McMullen justified the company’s opposition to the proposal by stating that many Kroger employees operate under collective bargaining agreements and that Kroger has been conducting internal pay equity analyses since 2016. Yet over 30% of Kroger’s employees are not covered by collective bargaining agreements and these agreements also do not address the need for median pay gap disclosures, which assess structural racism and sexism within the company. Nonetheless, UFCW 3000 welcomes the opportunity to improve the standards codified in its collective agreements with Kroger to address pay inequities. Additionally, Kroger has not publicly published its internal pay equity analyses which would provide crucial transparency to shareholders.

Earlier this year the Pew Research Center released a report finding that across the economy women earn just 83% of men’s earnings. Women of color continue to face larger wage gaps, with Black women earning 64% and Latina women earning 54% of what white, non-Hispanic males earn. In 2022, a report by the Economic Roundtable found that African American, Latinx and Native American workers at Kroger experience economic insecurity at higher levels than Kroger workers who are white.

Kroger workers like Sam have continued to experience structural discrimination within the company -- from being over-looked for promotions to being told by Kroger that they could not wear Black Lives Matter buttons. Sam was one of the UFCW 3000 members who testified in UFCW’s winning case to protect workers right to wear Black Lives Matter buttons at work over the objection of Kroger. In the case, it was concluded that Kroger had violated the law when denying these workers the right to wear the Black Lives Matter button.

"Kroger is in need of greater accountability on racial and gender pay equity and investors made that message clear to the board today.” said Julia Cedarholm, Senior Associate at Arjuna Capital. “Transparent reporting of pay equity builds trust with investors and employees, and ensures the company is managing its internal pay equity and achieving its diversity and inclusion goals.”

“It is our belief that companies like Kroger need to be far more transparent with, and accountable to, the public. They are in the midst of their attempt to push forward on a proposed mega-merger of unprecedented size with Albertsons – a merger that would, if approved, create a single grocery store company with over 700,000 employees. These companies need to be clear about how they treat workers, and workers and the communities we live in all have a right to know,” said Faye Guenther, President of UFCW 3000.

Nearly half of the largest 100 companies in the US now report statistically adjusted pay data, and at least 40 US companies already report or have committed to reporting median pay data. While adjusted pay data compares how people of color and women are paid for the same roles as their white male peers, unadjusted median pay data accounts for structural racism and sexism that relegate people of color and women into lower paid jobs. Kroger currently reports neither.

UFCW 3000 represents over 53,000 workers in Washington state, Northeastern Oregon and Northern Idaho in grocery stores, health care, food processing, retail, and many other industries. Over 12,000 are employed by Kroger. UFCW 3000’s mission is to build a powerful Union that fights for economic, political, and social justice in our workplaces and in our communities. For more information, visit www.UFCW3000.org.

Arjuna Capital is a sustainable investment firm that works with accredited investors and institutions to invest their assets integrating Environmental, Social, and Governance (ESG) risks and opportunities. Arjuna Capital has been recognized for using shareholder resolutions to promote racial and gender pay equity in the tech, banking, and consumer sectors. www.Arjuna-Capital.com.