by Marc Benioff
“We need to determine if pay inequality exists here,” Cindy announced.
I’m sure the look on my face betrayed the mix of indignation and astonishment I was feeling. I’ll admit, my defensiveness was welling up. For starters, I believed that Cindy and Leyla’s mere presence undermined their point: These high-ranking and highly paid female execs were walking, talking proof of Salesforce’s commitment to gender equality.
Moreover, I’d been working hard at this problem for three solid years. In 2012, I’d begun to notice, with horror, that when I called a meeting, the number of women in the room was often close to zero. I soon discovered that less than 29 percent of Salesforce’s total employees were women, and they made up only 14 percent at the leadership level. To make sure talented female employees were being considered for leadership roles, I’d started an initiative I liked to call the Women’s Surge. I announced that going forward, gender equality was going to be made a priority. And that from now on, at least 30 percent of the participants at any meeting, from a large management session to a small product review, should be women.
Holding equality as a value is not just a matter of fairness, or doing the right thing. Nor is it about PR, or “optics,” or even my own conscience. It’s a crucial part of building a good business, plain and simple. And there is an endless amount of research to prove it. A McKinsey & Company study, for example, showed that companies with more gender diversity on their executive teams were 21 percent more likely to outperform less-diverse teams in terms of profitability. In addition, companies that rank in the top quartile for the ethnic and cultural diversity of executives were 33 percent more likely to be more profitable than those that ranked lower.
A survey of more than twenty thousand publicly traded companies in ninety-one countries by the Peterson Institute for International Economics found that companies with more women holding executive positions in corporate management correlated with increased profitability. In fact, firms with women holding at least 30 percent of top executive positions were shown to add one percentage point of net margin gain compared to those with men-only executive teams.
Back in 2015, I knew we still had a long way to go on this issue, but I was utterly convinced that Salesforce belonged to the tiny minority of tech companies that truly valued gender equality. So I simply did not believe that pay disparities could be pervasive. “Impossible,” I told them. “That’s not right. That’s not how we operate.”
Cindy leveled her gaze. Then, in the measured tone she’d used to talk me out of wrongheaded positions in the past, she explained that she’d invited Leyla to join her at this meeting because they had both independently arrived at the same concern. “We surged, we got bigger jobs, we got promoted, and that’s when we started to put our heads together,” Cindy explained.
Leyla, who’s also known for her directness, jumped in. “Look, Marc,” she said. “Men at my level are buying expensive Teslas. Maybe it’s just a feeling that men make more than women. But maybe it’s an ugly fact.”
I knew she wasn’t implying that any pay disparities were deliberate. Unequal pay is a stubborn, slippery problem in business, and Cindy had brought studies showing that in 2014, a woman working full time earned, on average, about 79 percent of what a man did, according to the U.S. Department of Labor. The Institute for Women’s Policy Research had recently found that from 2001 to 2015, women earned roughly half of what men did, even when taking into account time off for family or child care. And, as I later learned, the wage gap persists even for highly educated executives: Data from a 2018 Financial Times ranking of the best global MBA programs showed that women earned, on average, 9 percent less than men before receiving their degrees and 14 percent less three years after graduation.
That’s all absolutely true, I told Cindy, but how could this issue persist inside a company that works so hard to avoid it?
Cindy sat back in her chair and patiently launched into an explanation of how pay gaps sneak into the workforce. Unconscious bias plays a significant role in how men and women are treated when salaries are set. Women workers often sacrifice better wages for flexible hours, typically because of family considerations (a burden that tends to fall more heavily on women than men). Many, she reminded me, spend years trying to catch up after failing to negotiate aggressively for higher pay early in their careers.
“We can either lead on pay equality or we can follow,” Cindy concluded. “But this issue will only get bigger. It won’t go away.” She added, “We’re not a company that follows.”
Cindy and Leyla hadn’t come to my house just to rattle my cage. They had a proposal. Why not order an audit to conclusively determine whether men and women were being paid equally? Convinced that the data would be vindicating, I immediately agreed to commission a salary review for all seventeen thousand Salesforce employees we had at the time.
“Let’s go from top to bottom,” I said, “one person at a time.”
For a brief moment, Cindy looked relieved. Then I saw a flicker of worry creep back onto her face. Before we went ahead, she told me, she wanted to make sure this audit wouldn’t be a hollow exercise. What can’t happen, she said, “is we do the assessment, look under the hood, see a big dollar sign, and shut the hood.” In other words, she wanted me to commit to acting on the results, no matter the price tag; did she have my word that if a wage gap was found, we would close it, immediately?
“Of course I agree,” I said.
“Well, you know what it’s gonna cost you, don’t you?”
Upon hearing this, I’ll admit I started thinking like the CEO of a publicly traded company. What if they’re right? I wondered. Could it be a $10 million hit? Or $50 million?
“What’s it gonna cost me?” I asked.
“Well, I don’t know,” Cindy replied.
I had always thought I was more progressive on gender equality than most male technology executives. Now I was about to get the chance to prove it.
“Okay, I agree.” I said. “Let’s do this.”
Data vs. Megaphones
In Chapter Two, I talked about how I’d taken a very public stand against LGBTQ discrimination in Indiana, and later, I would fight a similarly odious bill in Georgia and also North Carolina that required transgender people to use public bathrooms based on their birth sex. I’d always sort of lumped all issues of “equality” in the same basket. But in talking to Cindy and Leyla, I was beginning to realize that gender discrimination is a different kind of monster. The wage gap isn’t the result of some bill that got pushed through Congress. Equal pay isn’t something most politicians talk about at rallies to fire up their base. There’s no one single enemy to identify and go head to head with, nor is there a simple, universal solution to champion.
Instead, it’s a pernicious and far-reaching problem that unfolds quietly, everywhere, all the time, behind the closed doors of conference rooms where decisions get made (usually by men). Which is why fighting for gender equality would demand much more than the blunt tools that had worked in Indiana. Rather than simply using my voice, and then employing Twitter as a megaphone to amplify it, this battle would require digging through data, listening to people, asking uncomfortable questions, and examining unconscious behaviors. Anything less would be like trying to perform brain surgery with a butter knife instead of a scalpel.
In late April, as the audit was just getting under way, I decided, in the interest of transparency, to send an all-employee email. “I have been working with Cindy Robbins, Leyla Seka, and the rest of my leadership team to ensure that men and women at Salesforce are receiving equal opportunity and equal pay,” I wrote. “This is a multi-year project we are embarking on, but it is an important endeavor for both our company and our industry at large.”
At this point, I still believed that the next all-employee email I would send on this matter would be a triumphant one, declaring that we had determined co
nclusively that across the board, male and female employees of Salesforce were being paid equal salaries for equal work.
Unfortunately, this did not come to pass.
Meanwhile, we assembled a cross-functional team for the pay assessment, and developed a methodology with outside experts that analyzed the entire employee population based on objective factors that determine pay such as job function, level, and location. The assessment grouped employees in comparable roles and analyzed compensation of those groups to determine whether there were unexplained differences in pay among gender globally.
When the results came back a few months later, they left no doubt about one thing. Salesforce did have a pay gap. Moreover, it wasn’t just an isolated phenomenon in a handful of offices. Glaring differences were scattered throughout the whole company in every division, department, and geographical region. The virus, in other words, was everywhere.
I couldn’t help but hang my head. I was disappointed and, frankly, chastened. These problems were so close to home that I’d failed to see them clearly, even as they were unfolding right under my nose. That day, I informed my board and executive team that Salesforce would soon be incurring some additional expenses, as I had every intention of making good on my promise to Cindy.
In all, we found that 6 percent of employees, mostly women but also some men, would need their salaries adjusted. We didn’t want to reduce anyone’s pay, so we adjusted salaries upward. All told, the total cost of making these adjustments for our U.S. employees worked out to about $3 million: lower than I had feared. That’s not a small sum, but given how profoundly appropriate and necessary this was, it seemed like a relative bargain.
* * *
In the months that followed, I began to speak out about pay equality—everywhere from a dinner at the Los Angeles home of actress Patricia Arquette, to an innovation summit in Tokyo, to the White House. So you can imagine my astonishment and, to be honest, embarrassment, when Cindy came to see me again.
One year after conducting our first audit and making that $3 million correction, we’d run the numbers again. Turned out we needed to spend another $3 million adjusting the salaries of employees whose compensation had fallen out of whack since the last audit. “How can this be?” I asked Cindy and the executive team.
It gave me some relief to discover that these figures were largely a consequence of growth. We’d recently gotten about 17 percent bigger after buying two dozen companies, and it turned out that in the process we hadn’t just inherited their technology, but their pay practices and culture, too. As a result, the share of employees who were being undercompensated based on sex, as well as race and ethnicity, had actually increased to 11 percent from 6 percent the year before.
Realizing that this had the potential to become a recurring problem, we decided to take more stringent measures. We devised a new set of job codes and standards and applied them to each newly integrated company to make sure everyone performing similar work was similarly compensated from day one. From there, Cindy’s team began reviewing merit increases, bonuses, stock grants, and promotions to root out disparities there, too.
It took some tinkering to get these policies right, but they eventually became part of the Salesforce firmament. In 2018, Cindy and I were interviewed about our gender pay initiative by Lesley Stahl for a segment on 60 Minutes—a segment that I hoped would encourage other CEOs to take a look at the pay practices at their own companies. We also talked about the reality that, as with most things in business today, equality is a moving target, and we were well aware that our work was far from finished.
Case in point was a customer call I made with our financial-services sales team to JPMorgan Chase in early 2018. I typically wouldn’t have gone to this meeting, but I was attending a dinner there that night hosted by JPM’s CEO Jamie Dimon, so I decided to tag along. I walked over to the meeting—a brisk fifteen-minute stroll from our Salesforce Tower New York in Bryant Park to the JPM headquarters in midtown—with the team leader, Steve Moroski. Over a quick snack of falafel purchased from a hot-dog stand outside JPMorgan’s Park Avenue high-rise, Steve pitched me on his idea to bring Salesforce technology into the Chase consumer-banking network. The pitch was excellent, and I felt good about his plan.
But once we were seated around the long mahogany conference table, my enthusiasm quickly turned to alarm—and disappointment. The sales people Salesforce had sent to make the presentation were all men. Immediately after the meeting I slipped Steve a tersely worded note: “Why do you not have any women sales people?” Then I headed into my dinner.
After receiving what he later called my “love note” to him, Steve immediately told his rapidly expanding team that there were going to be some changes in how they chose its future members: “We hire the best candidate and she’s out there.” I’ve since noticed Steve often has women account managers lead our sales presentations at the big banks and securities firms. Looking at the data, my favorite gauge, I learned that his enterprise banking team of sixty-five sales people had gone from just 16 percent women to 37 percent women. Now one-third of his leaders were women, up from zero.
His comment to his team reflects an important point about our approach to equality. I don’t believe we should be hiring any woman who applies simply for the sake of meeting a quota. But I do insist we go the extra mile to find those highly qualified women candidates who we believe would be the best fit for the role, and strive to take unconscious bias out of the hiring process.
Equalizing pay wasn’t an easy process, or a cheap one: after our third pay assessment, we’d spent a total of $8.7 million addressing differences in pay based on gender, race, and ethnicity. It has already begun to pay off in incalculable ways, and its benefits will continue to accrue for years. Already, our commitment to equality has helped land us the number one spot on Fortune’s list of best companies to work for, as well as the top spot on People magazine’s list of “Companies That Care” two years in a row. And it’s contributed to our ability to attract the very best and brightest talent in the country, particularly the enormous amounts of female talent that many of our competitors are failing to tap. For example, Steve Moroski shared with me that once his banking team reached the point where it employed 20 percent women, their hiring of female sales people took off. “We were plugged into a new network, and women wanted to come to Salesforce,” he explained.
What all of this has shown me is that inclusion isn’t monolithic. The fight for equality is a collection of many battles on different fronts, each one presenting unique challenges and requiring unique remedies. The levers that work to attack one problem may be useless in addressing another. To navigate this, everyone inside a company has to be able to recognize their blind spots and be flexible enough to try new solutions.
Unfinished Business
In early 2018, I noticed a few women around the office, and a couple of men, reading Emily Chang’s Brotopia: Breaking Up the Boys’ Club of Silicon Valley. This account, which The New York Times Book Review called “a well-researched history of how Silicon Valley became a glorified frat house,” helped me understand that the problem of sexual harassment went far beyond office romances and hot-tub parties. It was a symptom, albeit a serious one, of a much larger and more systemic problem: namely, an organizational culture that was willing to tolerate it.
Since Cindy and Leyla walked into my office in 2015, I’ve learned a great deal about how a company’s culture can breed inequality in ways small and large. “Unconscious bias” is a big one, and unfortunately it’s also a swamp you can step into even when your intentions are good. And step into it I still sometimes do.
During a March 2017 event at Salesforce headquarters, I hosted a session to introduce our new product roadmap. The audience consisted of reporters, analysts, and customers, with thousands of others watching via livestream. We were also celebrating Salesforce’s eighteenth birthday, so my
wife, Lynne, came along.
There were to be four speakers, all Salesforce executives. The first three were men, and when I called each one individually to the stage, I shook their hands and thanked them. When the fourth speaker, a woman, came to deliver her remarks, however, I gave her a quick hug.
After the presentation, Lynne pulled me aside. “You didn’t hug the men, so why hug the woman?” she said. “That diminished her; they are all professionals.”
She was right, of course. I had treated my female executive differently, and until that moment I had zero awareness of it.
I was learning that unconscious bias shows up in all kinds of ways, especially in industries like tech that have historically been largely male-dominated. Ellen Kullman, the former CEO of DuPont and co-chair of Paradigm for Parity, an organization of high-powered business leaders whose goal is to achieve full gender parity in the workplace by 2030, once pointed out something that’s both encouraging and, to me, rather daunting. Since men hold the majority of leadership roles in the corporate world, she said, they play a critical role in advocating for women and mentoring them. “Until you level that playing field,” Ellen says, “you’re going to get that same outcome.”
Mentorship is something I’ve always been comfortable with, and I eagerly encouraged Cindy to pilot a mentoring program targeting high-potential women at the company. When the feedback came back, the reaction was unexpected. While the women appreciated the investment being made, they didn’t want to be in a program just for women. It made them feel singled out (not in a good way), as if they were in a cohort that needed to be “fixed.” They had a point. These rising stars wanted to be part of a mentoring group for high-potential employees—men and women. So we made those adjustments and today have “co-ed” programs in place in both our tech and sales departments.