A Big Investor Is Worried About Inequality

After a breakthrough year for Wall Street, when bonuses hit a record, there’s also a huge gap between the highest-paid workers and the staffers earning minimum wage.

“There’s no question the disparity between those at the top versus those at the lower end of the pay scale -- the gap is growing,” Tom DiNapoli, New York’s comptroller who oversees the state’s pension, told me in a Bloomberg Television interview. “That creates other concerns in terms of equity issues.”

“The context that we have to keep in mind is we like Wall Street being successful from a New York perspective because we get the tax revenue that comes from that,” he said. “Whether you love Wall Street or you hate it, we like to have the tax revenue.”

DiNapoli’s comments come as many high earners have been leaving the city for lower-tax jurisdictions like Florida. Yet despite that movement, the state’s workforce in the securities industry dropped only by 600 jobs to 180,000 last year.

But the movement over time is more drastic. Bloomberg’s Jenny Surane notes that New York’s share of the securities industry fell to 18% from 33% three decades ago, as more parts of the U.S. sap up jobs.

The pay-equity gap is still troubling for many. Investors are also taking notice mostly as it pertains to women and minorities within the biggest firms.

We spoke to Natasha Lamb, the co-founder of Arjuna Capital, which has rated banks and other big corporations on their pay-equity policies. She’s been taking an activist stance, and you’ll see the efforts discussed more publicly this proxy season. Here’s why Citigroup is rising up on her ranks and many other big banks are falling behind.

Work From Home

UBS is one place where working from home -- or other locations outside of major city centers -- is becoming a bigger option. The firm is creating a way for employees to work 100% remotely.

Between 10 and 15% of employees are expected to go that route, according to Tom Naratil, UBS’s president of the Americas. More than 70% of employees are likely to go hybrid. More employees have also begun to work from UBS locations that are outside of New York, of which there are about 300 across the country. That includes for positions like investment banking, where the work is typically required to be in-office.

Naratil believes this could help diversity and inclusion efforts, making life more flexible for working mothers, single parents and veterans. “For the industry, we’re all going to end up in the same place eventually, because the talent is going to move,” Naratil said.

Equal Workforces

Anne Clarke Wolff spent more than three decades thinking she could change Wall Street from the inside. “I didn’t want to leave Wall Street with less diverse people in high earning seats than in 1990, which is what it felt like from my own experience,” she said. Thus she set out to create her own firm, Independence Point.

“As companies and clients have clearly embraced the ESG movement, it was amazing how little representation there was on the most important advice that clients need” around transactions, she told us during the Bloomberg Equality Summit this week.

David Rubenstein, who co-founded Carlyle, made a similar critique about a long-time scarcity of women in investment banking. He explained he was more easily able to recruit women from outside of Wall Street to help diversify the ranks of the firm he helped build.

Now, more than half of Carlyle’s assets are run by women. “We’re fortunate to have more diversity than many of our peers,” he said. “We’re pretty proud of what we’ve done.”

More on Wall Street

• Visa is expecting workers to be in office half the time, while being present on two “collaboration days,” CEO Al Kelly tells Bloomberg’s Surane.
• Investors seeking to pull money from Coatue get hit with a side-pocket, Bloomberg’s Hema Parmar and Melissa Karsh report.
• These are the hedge funds bargain hunting among beaten-down Russian debts, a controversial trade, according to a Financial Times report.
• AFL-CIO President Liz Shuler tells Bloomberg that she’s concerned about the central bank “rashly” raising rates, at the expense of jobs.
• ICYMI: Bloomberg’s Max Abelson and Jordyn Holman catalog the quest of a Wall Street lifer -- who worked with many of the world’s biggest hedge funds for years -- as he sets off to build a “non-racist” bank. We speak to them about Alex Ehrlich’s journey for Quicktake.

Another big week ahead. Send tips and opinions to sbasak7@bloomberg.net, and hoping you have a great weekend in the meantime.