Posted: March 16, 2021
Improving workplace diversity has been a hot topic in the United States for quite some time. Although the state of diversity in corporate America is leagues better than it was 50 or so years ago, there is still room to improve in terms of social equality. Right now, the overwhelming majority of major executive positions are held mainly caucasian males who also have, on average, higher median salaries than women or people of color. Companies have noticed this and now are starting to take more concrete measures towards creating a more diverse corporate America. In particular, they are starting to directly tie executive compensation to various diversity goals. This article will take a look at some examples of how diversity goals in the United States have been directly tied to executive compensation. Chipotle Chipotle, the major Mexican restaurant chain, announced that this year they will tie 10% of their executives’ annual incentives towards achieving their company goals in terms of diversity. These goals are for both corporate positions as well as at individual locations. At the restaurant level, they are hoping to maintain racial and gender pay equality as well as promote more women and people of color within each location. One way that they plan to do this is by implementing a training academy with online courses that teaches a wide range of skills and is available to a large audience. This will allow motivated employees to learn skills like conflict resolution and goal setting so that employees of all backgrounds and upbringings will be able to advance in Corporate America. Since the company employs around 88,000 people, this is a very good start to offering more opportunities to a wide range of people. McDonald’s Another food chain that has decided to tie executive compensation to increases in employee diversity is McDonald’s. Micky D’s has said set new goals for diversifying the company and has also decided that, for the first time, they are going to start publicly releasing the demographic breakdown of its workforce. This new structure means that the executive suite, particularly CEO Chris Kempczinski could potentially lose out on 15% of his $2.25 million annual bonus if he does ensure that the company meets these goals. This program, if it succeeds, will increase the portion of women and different people of color in senior leadership roles within the company. McDonald’s has said that they want to increase the number of women in leadership roles from 37% to 45% globally by the end of 2025. Starbucks A third company that has announced that executive compensation and incentives will be tied to company diversity is Starbucks. Starbucks announced that they plan to tie CEO salary and executive pay to the success of their initiatives to increase diversity throughout the company. Specifically, they are aiming to increase the percentage of people of color at the corporate level to 30% by 2025. Currently, about 18.5% of their employees at the level of senior VP or higher or people of color. To learn more about maximizing executive compensation, visit our Contact Page, or contact us directly by email at email@example.com or by phone at 415-618-6060.