Along Citigroup Inc.’s path to naming the first female chief executive officer on Wall Street, the bank had to confront some grim truths.
For starters, the bank that Jane Fraser takes over in February pays women just 73 cents for every $1 men get, an even wider gap than the national average. And short of 40% of Citigroup’s managers are female.
Those figures show that Fraser’s historic elevation is far from a capstone. But the bank has spent years getting to this point, and a willingness to publicly face its shortcomings has helped it outpace rivals in many key measures of progress on Wall Street’s slow road to gender equality.
“These things don’t just happen,” said Jeanne Branthover, a managing partner in the global financial-services practice at the executive search firm DHR International. “They made sure they were identifying people to move up the ladder that were not just men.”
Fraser, 53, offers a sign of the advance and an expectation for more. When she takes over, the bank’s 16-member board will be half female, a far cry from the three women that sat on the board during the last CEO handover eight years ago. The executive management team is also stocked with women overseeing functions such as compliance and regulatory affairs — critical areas as the bank prepares for increased regulatory scrutiny of its infrastructure and controls in the coming months.
Sara Wechter was CEO Michael Corbat’s only female direct report when he rose to the top job eight years ago. Now Citigroup’s head of human resources, Wechter credits Corbat with the strides made in female representation. But she said there’s more to do.
“We need all of the thousands of managers to be as dedicated as the executive management team is,” Wechter said in an interview. “This has been something we’ve been working on year after year.”
Citigroup’s campaign for greater gender equity got a fresh spark five years into Corbat’s tenure: He and then-Chairman Mike O’Neill appeared at the company’s 2017 annual meeting, arguing against a shareholder proposal filed by Arjuna Capital that would require the bank to publish a report about its policies and plans to reduce the gender pay gap.
The moment was cringe-worthy: In a stilted back-and-forth with multiple shareholders, Corbat and O’Neill conceded that they supported the idea of reducing pay disparities, but argued releasing the data wouldn’t help. After the meeting, Corbat and other members of the board believed their answers fell short and decided they wanted to make Citigroup a leader on the issue.
“Citigroup has worn their work on gender equity as a badge of honor in a different way, in a more authentic way, than the other banks,” said Natasha Lamb, a managing partner at Arunja, which has long pushed for banks to disclose more about their gender pay disparities.
A year later, the bank announced it would seek to boost the number of women managers in roles from assistant vice president to managing directors within three years to 40%, up from 37% at that time.
For some roles, the company hopes to go further. The bank is seeking to increase female representation in its analyst and associate programs to 50%. In 2019, 45% of the bank’s full-time analyst and associates were female, up from 35% a year earlier.
In 2019, the bank revealed the pay gap between men and women in its global workforce. It was an ugly number that showed men held most of the highest paying jobs at the bank. But, to this day, it’s one of only a handful of companies to offer such transparent pay disclosure.
“To really make lasting change, we know we need to take a comprehensive approach – board and senior level representation, benefits and support for female colleagues, male allyship, examining and disclosing what the data was telling us and using our voice to draw attention to this very important issue,” Corbat, 60, said in a statement.
Citigroup has sought to seize on the moment, developing an ad showing employees’ daughters at the moment they first learned about the gender pay gap and unequal opportunities. Many of them displayed anger or confusion.
Gender issues are far from Fraser’s only challenge. One of the first orders of business will be cleaning up the firm’s infrastructure and controls as regulators, including the Office of the Comptroller of the Currency and the Federal Reserve, weigh whether to publicly reprimand the bank over continued deficiencies. She’ll also be charged with improving Citigroup’s returns, which lag behind peers.
Fraser won the top job because the board believed she could best tackle those challenges. A bonus of her taking that role, Wechter said, is it will help the bank hire, promote and keep talented women.
That impact is significant to people like Erica Witte, a director in Citigroup’s trading division. Witte was driving her daughter Paige to her first day of kindergarten when she told her the news about Fraser’s promotion.
“Guess what, mommy’s big company where she now works will now be run by a mommy too. This will be the first time a mommy is the big boss,” Witte said in an email to colleagues.
“Paige said, ‘Really? Can I be a mommy boss too one day?’”
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