Morgan Stanley

Report for Morgan Stanley at Work Shows Women Significantly Lag Men in Equity Compensation at Private Companies

Mar 19, 2021

Firm’s Transparency 2021: Addressing Gaps in Equity Compensation report highlights how private companies can use equity compensation to create equity parity and opportunity among their workforce

New York —

Shareworks by Morgan Stanley, a leading equity plan management platform and division of Morgan Stanley at Work, today released a new report, Transparency 2021: Addressing Gaps in Equity Compensation, which was independently researched and authored by Rebel & Co, a third-party research and strategy agency. The report reveals that despite the focus on closing the gender pay gap, inequity at private companies persists in equity compensation plans with only 41% of women reported participation compared to 52% of male counterparts.

The report also found that the equity compensation gap exists among working women and among Black, Indigenous and People of Color (BIPOC). Of those individuals who were granted equity as part of their compensation, only 25% were working mothers, compared to 60% of working fathers. In addition, only 12% of equity compensation recipients are BIPOC, compared to an average of 42% White plan participants.

“Education on equity compensation, diversity and the value of inclusivity can serve as an important differentiator in equity plan design and as a tool in combating inequalities,” said Amy Rodriguez, Head of Private Market Relationship Management at Shareworks by Morgan Stanley. “The report explains the disparity, unpacks what is contributing to these disconnects and provides key considerations that equity plan administrators can use to lay a foundation to create equitable opportunities in their organization.”

In the context of inequalities at work, the way in which equity is administered, and to whom, may unintentionally exacerbate obstacles to achieving equality in the workplace. Even in the presence of equal base pay, equity plans can increase pre-existing disparities. To establish diverse equity compensation participationthe Transparency 2021: Addressing Gaps in Equity Compensation report also highlights five strategies for diverse equity compensation plans.

  1. Education on Equity is Key: Consider offering routine virtual workshops and seminars, educational articles and content that break down the value of equity, the role it plays in the company and the ways to access the offer. Lack of education was cited as one of the largest reasons that employees do not participate in their equity plan — executives reported that only 50% of their eligible workforce participates in equity.
  2. Mentorship and Training: Equity plans are often tied to a specific title or job role. Offer a training or mentorship program focused on women, BIPOC and underrepresented minorities to help create a path forward for all employees who seek career growth and advancement opportunities. This is a great investment back into the organization while communicating individual and collective value.
  3. Objective Metrics for Every Role: To combat inherent biases and potential discrimination, communicate clear metrics for each role that are measurable and transparent to the employee along with regular employee reviews covering progress and areas for improvement.
  4. Diversity and Inclusion Metrics for Leadership: Incorporate Diversity and Inclusion (D&I) metrics in executive performance goals that are transparent and measurable. This will help to ensure the organization is headed towards an inclusive workforce.
  5. Examine Plan Design: Consider reviewing existing equity plans to determine alignment with bonus structures and other benefits through the lens of making overall equity compensation plans more equitable. When considering the type of equity compensation plan to implement, look to level the playing field by ensuring accessibility across the board. Survey underrepresented plan participants to identify and remove barriers to achieving the full potential of the plan.

To get a copy of the report, including full results and for more information about Shareworks by Morgan Stanley, please visit: https://discover.shareworks.com/equity-administration/equity-compensation-equality-report

About Transparency 2021: Addressing Gaps in Equity Compensation

The findings are based on a global survey of 574 respondents, which included 272 Executive and 302 Employees in various industries and regions. Criteria for Executives included CEO, CFO, CHRO, DEP or CEP located in the U.S., U.K., Australia or EMEA. Employee survey participants must previously have participated, or currently participate in their employee equity compensation plan and be located in the U.S., U.K., Australia or EMEA. Data was collected from the U.S., EMEA and Australia. Survey and interviews were conducted in English only. The research and authorship was independently carried out by Rebel & Co, a third-party research and strategy agency, on behalf of Shareworks by Morgan Stanley in January 2021.

Shareworks is a leading global stock plan administration platform that provides software and administration services to corporate clients around the globe. Shareworks is a part of the Morgan Stanley at Work comprehensive suite of financial solutions, which encompasses Equity Compensation (including E*TRADE Equity Edge Online), Retirement Solutions and Financial Wellness (including Gradifi by E*TRADE).

Morgan Stanley at Work combines cutting-edge planning and risk management software, Morgan Stanley intellectual capital and financial education delivered through multiple channels to enable employees to build a holistic plan to achieve their financial goals. Shareworks by Morgan Stanley currently has offices in the U.S., Canada, Europe and Asia Pacific.

The Morgan Stanley acquisition of E*TRADE in 2020 further expanded Morgan Stanley’s leadership in workplace financial solutions with the Firm now serving over 4.9 million stock plan participants.1

Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and -investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services.

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment banking, securities, wealth management and investment management services. With offices in more than 41 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

1 “Morgan Stanley at an Inflection Point: The Next Decade of Growth” Investor Presentation, January 2021.

Morgan Stanley at Work and Shareworks by Morgan Stanley are service marks of Morgan Stanley or its affiliates.

Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker-dealer in the United States.

© 2021 Morgan Stanley Smith Barney LLC. Member SIPC.

Media Relations Contact: Katrina Clay, Katrina.clay@morganstanley.com

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