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How to Change the World: Buy Stock. Make Demands. Repeat.

Meghan French Dunbar July 5, 2016
Natasha Lamb, director of equity research and shareholder engagement at the Boston-based investment firm Arjuna Capital, is on a mission to address the gender-based pay disparities prevalent throughout the tech world. Her weapon of choice is the shareholder proposal, a little-known, yet extremely effective tool that democratizes investors’ ability to participate in the governance process of companies they own stock in. Using the shareholder proposal, Lamb, 33, has brought the issue of gender-based pay equity to nine of the largest tech companies in the world, and is achieving dramatic results. We spoke with Lamb about the process, the business case for pay equity, and what gave her the courage to fight against the largest companies in the world.

On a basic level, what is shareholder engagement and activism?

Natasha Lamb: We are active investors and we’re seeking to amplify the impact of that capital beyond simply making a profit. One of the ways that we do that is through shareholder engagement and activism. We engage with companies on a host of different sustainability-related issues that make both financial sense and are good for the company and, hopefully, the world at large.

We will reach out to companies when we think there’s an issue that they’re either not paying attention to or that they need to improve on, and we will suggest an alternative path or more disclosure. The tool that we use most often for that is the shareholder proposal. We’ll always make the business case for why improving their practices is in their own enlightened self-interest.

Can you tell us about your most recent shareholder engagement piece?

NL: In 2014, we filed a first-of-its-kind shareholder proposal asking eBay to report on and close the gender pay gap. We did that because eBay is a tech company, and tech companies have a diversity problem and a women problem. However, they could actually improve performance and their ability to innovate because gender-diverse teams are shown to be a key contributing factor of innovation and performance .

We filed a shareholder proposal with eBay and their board opposed the proposal, which was an ill-timed opposition. They did so about 48 hours before Patricia Arquette made a rallying cry for equal pay for equal work at the February 2015 Academy Awards. Patricia’s message went viral and she was cast in a very good light, but eBay’s opposition to our proposal cast them in a less-flattering light. They continued to oppose it. The proposal went to a vote last May, and 8 percent of shareholders voted for the proposal — that was the baseline for where we started this campaign.

This year, we tried again, but we rolled out the proposal to nine big tech firms: Apple, Intel, Amazon, Google, Facebook, Expedia, Microsoft, Adobe, and, again, eBay.

The first company we engaged with was Intel, and we were able to withdraw our proposal because Intel reported that they had 100 percent gender pay equity and that they were committed to keeping that gap closed. They stepped out as a leader in this space.

The next proposal we had was with Apple. We were able to withdraw, again, because the company was willing to act, and instead of our proposal going to a vote at Apple’s shareholder meeting in March, Tim Cook stood up and reported Apple’s gender pay gap and committed to closing it.

However, other companies were more defensive, as eBay had been in the prior year. Amazon opposed the proposal at the SEC. They argued that the concept of the gender pay gap was too vague for shareholders to both understand and vote on, which was both a ridiculous argument and a losing argument. The SEC upheld the proposal and it was set to go to a vote. In the meantime, Amazon backpedaled and committed to be transparent and close the gender pay gap.

The next company we worked with was Expedia, which made what I would consider one of the most comprehensive commitments to date. They agreed to write the report that we asked for and to report out on all compensation components, including base compensation, bonus, and equity, because stock options are often an outsized portion of tech employees’ compensation packages. That was very exciting. We were able to withdraw there as well.

Since then, Microsoft has been transparent and committed to close the gap. We saw Facebook, the day before Equal Pay Day, come out and say that they pay men and women the same, although their disclosure was very weak and they did not give any quantitative disclosure or detail as to the components that they were reporting on. That proposal will go to a vote. We kept that proposal on the ballot because we felt that set a poor standard for other companies reporting.

Then, most recently, at eBay, the proposal went to a vote . Fifty-one percent of votes cast were in favor of the proposal. What I would say explains that is the incredible momentum of all of the other companies stepping out and committing to pay women fairly. There was really a sea change. On the same day, eBay came out with a statement and said that they were committed to writing the report that we asked for in the proposal.

We have two more proposals that are going to a vote in June: Facebook and Google. We’re in a dialogue with Adobe because the US Postal Service actually delivered our proposal late, later than their guaranteed date. So they were able to keep it out on a technicality, but they were also willing to engage in dialogue, so we’re continuing to engage with them. We’ll re-file, if we need to, next year. We’ll see how it all plays out. But it’s been really an incredible year with so much momentum.

On Equal Pay Day, I was at the State House in Massachusetts speaking about our work, and one of the senators who spoke before me said, “This is not only Equal Pay Day; this is Equal Pay Year.” And I really feel like that is true because the zeitgeist has changed. Women are no longer willing to live with this black box around compensation. We know there’s a problem, and there’s an easy solution, which is transparency and accountability, both to employees and to investors.

“Women are no longer willing to live with this black box around compensation. We know there’s a problem, and there’s an easy solution, which is transparency and accountability, both to employees and to investors.”

Thank you on behalf of women everywhere! Can you tell us more about why you specifically targeted the tech sector?

NL: I really wanted to address the structural barriers that keep and that have kept women from moving into leadership positions. When you look at the technology industry in particular, you see that there is a glaring gap in female leadership. For tech companies, in general, about a quarter of the workforce is female, and when you look up the ladder at executive positions and board positions, that number falls to about 10 or 11 percent. It’s really remarkable. One can assume that the pay gap widens as you go up that ladder as well; in fact, there’s a lot of evidence to show that.

We were looking to engage companies on how you close this leadership gap and we saw the gender pay gap as one of those structural barriers. I don’t think that any company sets out to improve their profit margins by paying women less, at least not consciously. But there is so much unconscious and structural bias at work, and the problem with unconscious bias is that we all have it and we don’t know we have it because it’s unconscious!

One develops unconscious bias as a child. There is a great piece done by Jimmy Kimmel, who, very surprisingly, is becoming one of my favorites. He went out on the streets of New York and asked children why men deserve to be paid more than women, and the children had a variety of responses. Most of them were disheartening. They said things like, “Well, women shop more online and men work harder.” There was one young girl who said, “This is just a messed up world we live in.” The last girl said, “Men make all the decisions, and we’ve never had a woman president.” I think she really hit the nail on the head, because women don’t see women in positions of leadership and that impression leads women into a vicious cycle. When you can change that cycle and see more women in leadership positions, then that begets more women in leadership positions.

That’s really the structural bias that we were looking to address through the pay gap because if you can’t attract and retain top talent, including women, you’re not going to be competitive, and you’re certainly not going to be performing at the same level as peers who can attract and retain top female talent and move them into positions of leadership.

When you filed these shareholder proposals, what was the business case that you made for gender-based pay equity?

NL: Technology companies, in particular, compete on innovation. Gender-diverse teams have been shown to lead to greater innovation. And, not only that, gender-diverse teams have been shown to result in better financial performance on a number of metrics, including return on equity, profit margins, and stock price appreciation. So there is a strong business case to be made for why companies should encourage women into positions of leadership and, certainly, pay them fairly. In short, big tech companies need to attract and retain top talent, including women, and, in so doing, they will experience more innovation and better financial results.

Why now?

NL: Women are not willing to wait another 40 years for the gender pay gap to close, which is the trajectory at the current rate of change; the gender pay gap is not expected to close until 2058. Looking back to the 1950s, when sexism in the workplace was the norm, it’s a sad reflection on a society that you would have to wait 100 years to close the gender pay gap. I think this is a critical time. Society is ready for change and women aren’t willing to accept this inequity anymore.

Did you just drop the mic? So, somehow in addition to these huge wins you’ve had in terms of pay equity, recently you’ve also had some massive wins in terms of climate change. Could you tell us about that?

NL: We were really blessed that at the same time that we won at the SEC with Amazon, we also won with Exxon and Chevron. That’s continuing an engagement that we’ve had for the last two years. In 2013, we filed the first carbon asset risk climate change proposal with ExxonMobil. Of course, they fought at the SEC and argued that shareholders did not need to weigh in on the fact that two-thirds of global fossil fuels’ proven reserves are unburnable if we’re going to prevent catastrophic climate change. And, certainly, we were arguing that this is the fundamental business risk that Big Oil is facing this century — that we’re just not going to be able to burn it all. In fact, we can only burn less than a third.

So, we filed this proposal asking them to describe the risk they face from stranded unburnable carbon assets and, luckily, we won. In a real about-face for Exxon, they came to the table and we were able to negotiate. In exchange for withdrawing our proposal, they agreed to write a 30-page report on the risk that they face from climate change as a carbon asset risk in particular.

The negotiation itself was really a landmark because it did represent such an about-face — just the fact that they negotiated with investors on this point. It was covered in over 500 global publications, including, of course, The Wall Street Journal, The Economist, The New York Times.

Then, when they put the report out, it was quite clear that they weren’t preparing for this risk at all and, in classic fashion, they denied the risk completely and argued that none of their carbon assets were at risk of stranding for several reasons. One, because global governments would not act and reach a global climate deal, which, of course, now flies in the face of the Paris Agreement. Their second argument was that they would not leave the world’s poor stranded and that emerging economies would need their energy.

Ironically, the report came out one day after an IPCC report that said that emerging economies and poor economies around the globe would be most vulnerable to climate change. And, of course, completely ignored any kind of technological leapfrogging from carbon-based fuels to distributed renewable energy. As an aside, that is a much more likely path — much like cell phones are used in emerging economies rather than long-line infrastructure for phone systems.

Third, they argued that it would just be too expensive; they argued that by 2090, consumers would be spending 44 percent of their income on energy if we were going to transition to a low-carbon economy. That is a number that is currently being investigated by the New York, California, and Massachusetts attorneys general because it represents a potentially misleading disclosure to investors, which is interesting in and of itself.

The report came out, and what we learned from that report was that they’re not preparing for the biggest risk that they face this century and that investors need to reconsider how they’re looking at these companies.

Last year, we filed a proposal both with Exxon and Chevron, asking them to shrink profitably and favor value over growth because a growth plan this century is complete folly when you can’t burn all of the oil that we already have. These companies are simply not going to make money in the same way they did last century. That’s for two reasons: 1) there’s only so much carbon we can pump into the air, and 2) the easy oil is really gone and all of the growth is coming from unconventional assets that are not only more expensive to develop but more carbon-intensive. That’s a double negative for developing those assets.

Investment in developing new oil assets has gone up 100 percent over the last 10 years, yet development of new reserves has only gone up 3 percent. I would consider it an irresponsible use of investor capital. We would like to see them focus on the most profitable projects, avoid high-cost, high-carbon investments, and return excess profits to shareholders so that shareholders can reinvest those profits in the new economy and in companies that are creating solutions to our global challenges.

Both Exxon and Chevron, again, tried to challenge the proposal at the SEC, and this spring we won our bid and it will go to a vote at both companies.

“Gender-diverse teams have been shown to result in better financial performance on a number of metrics, including return on equity, profit margins, and stock price appreciation.”

Where do you find the courage, as a single person, to go up against the largest companies in the world?

NL: I’m a young woman working in finance and I am lucky enough to be able to speak and act from the position of an investor. When I look at our global challenges and the role that companies play, I fully understand that it’s not just the companies that are the actors here. Investor-owners are also actors, and they have a voice. On a personal level, I believe that if no one speaks up and says, “Hey, this is wrong,” then nothing will ever change and, in fact, things will get worse. I feel compelled to speak up, and I understand that many people aren’t in a position to do so.

What is giving you hope for the future, that your children’s generation will see a different future than what we’re experiencing now?

NL: I see hope in so many areas. It’s easy to get bogged down when the weather is wacky and the news is bad, but there are so many fundamental changes that are happening across our economy. Women are taking a bigger role in our society and in positions of leadership. We have Hillary Clinton running for president and having a viable path to the White House. We’re seeing so much more strong female leadership and a shift in the balance from the masculine to the feminine in a much healthier way.

When I look at our energy economy, I see a transformation in how energy is created and distributed. I expect every house with southern exposure will have an array of solar panels in the near future, that the barriers to entry for that technology have pretty much disappeared, and that people will be able to plug in their electric cars to a house that is generating its own energy. That will completely turn our energy system on its head for the better.

We just bought a Nissan LEAF, and we got a two-year lease because we’re on a list for a cheaper Tesla. I am so delightfully surprised at how incredible a car it is. Once a critical mass of people get electric cars, no one’s going to go back. They’re simply better, and not just for the climate. On so many performance metrics! When I filled up the family Subaru the other day, it felt archaic. There I was, standing there with the fumes and the cold weather and waiting to pump these fossil fuels into my car, and I thought, “This is not the path forward.”



Step 1:

An individual or entity needs to purchase at least $2,000-worth of company stock.

Step 2:

The shareholder has to hold that stock for at least one year.

Step 3:

The shareholder can then create a shareholder proposal prior to the company’s annual meeting asking the company to change a particular practice.

Step 4:

The company can then either: 1) Commit to act in good faith and improve the practice addressed in the shareholder proposal, in which case the proposal will typically be withdrawn; 2) Challenge the shareholder proposal to the Securities and Exchange Commission (SEC) to try to get the SEC to throw the proposal out; or 3) If the SEC upholds the proposal, but the company does not commit to acting in good faith to address the issue, shareholders have a chance to vote on the issue at the company’s annual meeting, which can force the company into action if enough shareholders demonstrate they care about the issue at hand.



NOV ’14

Shareholder proposal demanding gender-based pay equity filed with eBay ahead of company’s annual meeting

FEB ’15

eBay sends statement indicating the board’s plan to oppose the proposal at their annual meeting in May

MAY ’15

The proposal goes to a vote at eBay’s annual meeting, but only 8% of shareholders vote for the proposal

SEP ’15

Arjuna Capital begins submitting shareholder proposals at nine tech companies, including Apple, Intel, Amazon, Google, Facebook, Expedia, Microsoft, Adobe, and, again, eBay

FEB ’16

Arjuna withdraws proposal at Intel after company commits to addressing gender-based pay gap

MAR ’16

Arjuna withdraws proposal at Apple after company commits to addressing gender-based pay gap

MAR ’16

After Amazon challenges the proposal to the SEC and the SEC upholds the proposal, the company commits to addressing gender-based pay gap and Arjuna withdraws the proposal

MAR ’16

Arjuna withdraws proposal at Expedia after company commits to addressing gender-based pay gap

APR ’16

Arjuna withdraws proposal at Microsoft after company commits to addressing gender-based pay gap

APR ’16

At eBay’s annual meeting, 51.2% of shareholders vote to support the shareholder proposal to address gender-based pay equity

JUN ’16

Proposals will go to a vote at the annual meetings of both Facebook and Google. As of press time, the outcome is unknown.




Shareholder resolutions and extensive negotiations with Coca-Cola (2007), PepsiCo (2010), and Nestlé Waters NA (2009), lead all companies to commit to increasing recycling rates by more than 50%. When fully implemented, these will result in 20 billion more bottles and cans recycled in the US.


As a result of a shareholder resolution, Best Buy agree to hold a pilot of an in-store electronics take-back program. After a successful 100-store pilot, it fully implements the program across all 1,000 US stores. The program has already recovered a billion pounds of electronics, with a new goal of 2 billion by 2020.


Exxon releases the first-ever climate asset risk report after shareholders file “Carbon Asset Risk” resolutions asking oil companies to recognize and disclose the financial and stranded-asset risk they face due to climate change.


When a shareholder resolution pushing McDonald’s to stop using plastic foam serving items receives 29% of shares voted in support, McDonald’s agrees to phase out foam cups and replace them with recyclable paper cups at 2,000 of its US stores.


Procter & Gamble shareholders ask the company to phase out unrecyclable packaging. The resolution gains the support of 25% of shares, representing over $35 billion. The company commits that 90% of its packaging will be recyclable by 2020.


Following a 2014 shareholder resolution pushing FirstEnergy to disclose its plans for managing its carbon emissions, the company begins its first-ever carbon reporting. In 2015, approximately 20% of shares are voted in support of a shareholder resolution encouraging the company to set a carbon target. Shortly thereafter, FirstEnergy adopts the most aggressive carbon target of US utilities: carbon reductions of 95% below 2005 levels by 2045.


Shareholder engagement results in three food companies — Dunkin’ Donuts, Krispy Kreme, and Starbucks — reformulating products to remove nano-titanium dioxide, an ingredient that initial studies indicate may be harmful to health.

Impact Investing / Stakeholder Capitalism
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