June will be a very interesting month for Alphabet, the parent company of Google.  On June 6th, the company will host its shareholder meeting where employees will present a proposal to link executive compensation to workplace diversity goals.  The idea behind the push is talent retention and future growth prospective.  Supporters of the compensation linkage argue that, unless something is done, the lack of support from the company may hinder the future of the company.

“As employees, we don’t feel that we can build good products that help make the world fundamentally better without having a clear diversity stance that’s built into the company structure,” one employee stated.

Alphabet has recommended a vote against the new proposal stating that the linkage doesn’t make sense.  The company has already “argued in its proxy statement that the proposal wouldn’t have any meaningful impact, even if it were approved, because Alphabet CEO Larry Page receives a base salary of only $1 per year and is not compensated based on performance.”

Zevin Asset Management, the investment firm that drafted the proposal, does not agree, stating that “Anyone whose compensation is reviewed in the proxy, people like Sundar [Pichai, Google’s CEO], we are thinking about them, too,” said Pat Miguel Tomaino, the director of socially responsible investing at Zevin. “If this proposal gets a high vote and the board moves to implement it, we expect they would implement it for the people for whom it’s relevant.”

How this would be implemented has not been made clear. Regardless, as a person who writes in support of diversity and inclusion, I have my doubts about the benefits of this if put into practice.  Linking pay / bonus to diversity has been done before and failed.  When done, employees often seek to support diversity for short term compensation benefits but don’t actually create a structure for it to sustain itself.

Diversity and inclusion is tricky. No one person or company has created a solution for it, but we do know resources are needed to make it happen.  I’ve said it once and I’ll say it again, inclusion needs to be a long term, 10 year plan to reach certain goals and not a 2 year one.  NASCAR’s Diversity Internship is a good example of an organization growing from a few interns to 30 in about 2 decades.  Breaking it down into a percentage growth that is amazing.

Creating a structure, recruiting and retaining talent and growing from there is key, not a quick 3 or 4 year solution.  I think we’re still in the infancy of diversity and inclusion and with the right support over time it can be where we want it to be.

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