Uber plans to tie executive bonuses to diversity targets

US company will factor in whether it meets specific diversity targets when it calculates bonuses for its chief executive and other top officials

File photo of an Uber car. Photograph: Laura Dale/PA Wire

File photo of an Uber car. Photograph: Laura Dale/PA Wire

 

Uber will factor in whether it meets specific diversity targets when it calculates bonuses for its chief executive and other top officials as the US ride-hailing company tries to increase the number of women and under-represented people in managerial roles.

The company declined to say how much of bonuses are contingent on reaching the diversity goals, but a spokesman said it was a “significant” portion. He said diversity was one of a “limited number” of metrics used to determine bonuses for chief executive Dara Khosrowshahi, chief financial officer Nelson Chai, general counsel Tony West and head of human resources Nikki Krishnamurthy.

Mr Khosrowshahi, Mr Chai and Ms Krishamurthy also have stock option grants that are contingent on the company’s equity valuation reaching $120bn, according to regulatory disclosures.

The diversity-related bonus policy was put into place this year. It calls for Uber to increase the number of women in managerial roles and above to 35 per cent by 2022 and to raise the percentage of under-represented employees at mid-level and above to 14 per cent in the same timeframe. The company did not disclose the current levels.

Uber has been struggling to overcome a reputation as a toxic workplace under co-founder Travis Kalanick and other executives who were pushed out in 2017 after a run of scandals.

Among the issues precipitating Mr Kalanick’s departure was a blog post by a former employee alleging sexism, harassment and tolerance of bad behaviour. Uber has also come under investigation by the US Equal Employment Opportunity Commission over accusations of gender discrimination.

Since becoming chief executive in 2017, Mr Khosrowshahi has brought in a new executive team, hired a head of diversity and inclusion and announced a new set of corporate values in an attempt to overhaul the company’s culture. However, progress has been mixed.

Tying executive pay to diversity and inclusion metrics was one of the recommendations of a report Uber commissioned from Eric Holder, a former US attorney-general, following the events of 2017.

Diversity goals

Advocates have lobbied other tech companies to adopt such policies. Microsoft said in 2016 it would tie diversity goals to executive bonuses after the company saw a decline in the percentage of female employees. Chipmaker Intel also includes diversity goals in its bonus calculation for top leaders.

Uber disclosed the new policy in its most recent diversity report, released on Monday. The data showed increases in the number of female workers and workers of colour, but that the company and its leadership remain largely white and male.

As of March 2019, 44.7 per cent of US employees were white, down from 48.6 per cent a year ago. Asian employees made up 33 per cent of the workforce, compared with 32.3 per cent. Uber said the proportion of black employees rose from 8.1 per cent to 9.3 per cent, and the percentage of Hispanic or Latinx (Latin American descent) staff increased from 6.1 per cent to 8.3 per cent.

Globally, women accounted for 40.9 per cent of the workforce, up from 38 per cent last year.

In technology-related jobs, black employees accounted for 3.6 per cent, up from 2.6 per cent, and 4.4 per cent were Hispanic or Latinx, up from 3 per cent. Women made up 21.9 per cent of the global tech workforce, up from 18 per cent.

Uber’s leadership was 59.9 per cent white. Black leadership rose from 2.8 per cent to 3.3 per cent and Hispanic or Latinx employees in leadership roles rose from 1.4 per cent to 2.7 per cent.

The proportion of women in leadership rose to 28 per cent, from 21 per cent in 2018. However, in tech leadership roles, the percentage of women dropped from 15.6 per cent to 13.8 per cent.

Copyright The Financial Times Limited 2019