The Katz v. Anheuser-Busch pay gap trial: a fizzler?
After a jury in St. Louis had decided that brewer Anheuser-Busch did not engage in gender discrimination when it determined how much Francine Katz, a former senior PR executive with the company, was going to be paid, the St. Louis Business Journal on 23 May 2014 ran a piece that looked at the wider implications of the pay gap trial.
Although the case involved a major corporation – Anheuser-Busch (A-B) – and serious dollars – Ms Katz was asking for USD 9.4 million in back pay plus USD 4.9 million in interest and an undetermined amount of punitive damages – the trial did not capture much media attention outside St. Louis. That may have been the most remarkable outcome of it all.
In all honesty, the St. Louis Business Journal pointed out, “the two sides were arguing over a few key issues. Francine Katz’s lawyers were trying to lay out evidence that she was underpaid because she was a woman, and A-B was trying to make the case that her role and her job were more limited than she thought. At the end of the trial, the jury foreman said the evidence was subjective, and because there was no smoking gun [conclusive evidence], the jury had to use their judgment.”
In St. Louis, however, the trial received quite some publicity. As the paper wrote: “On the days when August Busch III and August Busch IV testified, the courtroom was packed. The day the attorneys gave their closing arguments, every seat was taken, and people were standing in the aisles. People were really, really interested in what was going on in that courtroom.”
What made the case intriguing was that it opened a rare window into compensation at big companies. Compensation is something that’s not talked about a lot. Few people know much about it.
As said the reporter for the St Louis Business Journal: “At A-B, they would have these compensation books that were put together by the company’s HR staff with input from consultants and ultimately shown to the CEO and the board’s compensation committee, which had to sign off on it. These were previously confidential documents. You could see notations from different executives, with notes, like, ’Is this really the right benchmark? Doesn’t she deserve X, Y or Z?’ It was granular detail. At times, it was dense and almost mind-numbing. Some of the jurors had trouble staying awake during some of the video testimony.”
Still, the publication harbours doubts that the case will have an impact beyond the trial itself. In itself, the case was very contentious. The reporter, when talking to people who had worked with Ms Katz, found out that only half the people were rooting for her while the other half were thinking, “Hey, she got paid a lot of money [her salary was USD 1 million in 2002 when she got the job]. What is she complaining about?”
Maybe, eventually, it’s going to sway public opinion on women in business. As I see it, the issue is not so much women’s lesser pay, it’s the women’s near invisibility in top jobs that needs to be addressed first.
Incidentally, it was the investor Warren Buffett and some of his pals at top U.S. companies who on 1 May 2014 formed a new group committed to improving the gender balance at all levels of U.S. corporations. The group, called the “30% Club”, originated in Britain and was launched in the U.S. with 24 founding supporters and Bloomberg L.P. Chairman Peter Grauer as founding U.S. chair.
The 30% Club said it will start by focusing on female representation in senior leadership.
“This is a business issue as much as it is a diversity issue,” Mr Grauer said in a statement. “Businesses do better when they avoid ’group think’, and better gender balance is a key factor in business success. That said, we have a lot more work to do in the U.S. to improve female representation, and senior business leaders have to drive that change.”
The club was founded in Britain in 2010 with the goal of getting 30 percent female representation on boards of the top 100 stock market-listed companies (FTSE-100) by the end of 2015. There are now 92 members of the 30% Club in the UK, and the FTSE-100 has jumped from 12.5 percent women directors in 2010 to 20.8 percent as of March 2014.
Club supporters in the UK have focused on creating better gender balance by targeting talent management practices, executive search firms, shareholders and schools and universities, media say.
