State Street Corp. agreed to pay $4.5 million in back pay, plus $507,825.61 in interest, to settle allegations of gender and racial discrimination.
The agreement was entered into with the U.S. Labor Department's Office of Federal Contract Compliance Programs, or OFCCP, following the latter's evaluation of compensation data from State Street Global Advisors Inc.'s Lincoln Street office in Boston. The OFCCP on March 31 issued a notice of violations, claiming the company since at least December 2010 has discriminated against females in vice president, senior vice president and managing director roles, paying them lower base salaries and bonuses than their male counterparts. It also found that State Street similarly discriminated against black vice presidents, compensating them less than white vice presidents.
The agreement covers 305 female vice presidents, senior vices presidents and managing directors and 15 black vice presidents identified by the OFCCP as having been impacted by discrimination.
State Street denies it has discriminated against any of its current and former employees on the basis of race, gender or other protected classification. State Street Global Advisors, incidentally, had partnered with advertising firm McCann on "Fearless Girl," a statue of a young girl standing her ground in front of Wall Street's iconic "Charging Bull."
On top of the approximately $5 million in back pay and interest, State Street agreed to conduct compensation analysis for the managing directors, senior vice presidents, vice presidents at its Lincoln Street facility, to assess if its practices "have a disproportionately negative effect on the compensation of Females and Blacks." It will continue providing data to the OFCCP and will remedy through salary adjustments any statistically significant compensation disparities based on gender, ethnicity and/or race that cannot be explained by legitimate factors.