RI Treasurer Magaziner, Pinterest, Inc. Shareholders Secure Major Governance Reforms Tied to Improving Workplace Culture
This is as part of a settlement agreement announced by Rhode Island General Treasurer Seth Magaziner on behalf of the Employee Retirement Service of Rhode Island and other company shareholders.
The settlement is the first of its kind to embrace diversity goals around a company’s product.
The settlement’s vast changes place responsibility with the Audit Committee of the Board for implementation and oversight over certain reforms designed to create equal opportunities for employees.
They also require that a Board member act as a co-sponsor with the CEO for diversity, equity, and inclusion initiatives, which will ensure accountability exists for Pinterest’s top executives.
Other key reforms include the release of former employees from non-disclosure agreements (NDAs) who want to discuss the facts of their mistreatment, the creation of an external Ombuds office for employees; and external bi-annual pay equity audits that review performance ratings, promotions and compensation across gender and racial categories.
Diversity reports to shareholders will describe progress made in implementing pay equity and DEI goals.
The settlement also requires enhancements to Pinterest’s recruiting, hiring, and training, to support employees.
Combined, these reforms will substantially increase the value of the company for its investors and help ensure its continued future growth, as well as improving the workplace experience for Pinterest’s employees.
The settlement is with the Treasurer of Rhode Island, acting on behalf of the Employees Retirement System of Rhode Island, and other shareholders who alleged that Pinterest’s board of directors failed to respond to a widespread and pervasive culture of discriminating and retaliating against women and people of color.
The shareholders further alleged that by allowing the pattern of discrimination and retaliation to go unaddressed, the board of directors failed to act in the best interests of stockholders.
“We pushed for these sweeping reforms to support Pinterest's employees with a fair and safe workplace, and to strengthen the company's brand and performance by ensuring that the values of inclusiveness are made central to Pinterest's identity. This holistic approach will fundamentally support and positively impact Pinterest’s workplace culture in the years to come,” said Rhode Island General Treasurer Seth Magaziner, who acted on behalf of the Employees Retirement System of Rhode Island.
Treasurer Magaziner and Employees’ Retirement System of Rhode Island are represented by national law firm Cohen Milstein Sellers & Toll PLLC.
Cohen Milstein partner, Julie Goldsmith Reiser said, “We are pleased to have reached an agreement that recognizes the importance of board leadership in firmly rejecting a culture of sex and race discrimination and retaliation. It is critical that boards actively monitor workplace culture, and we encourage companies to demonstrate their commitment to workplace culture by aligning their business and product goals to also strive for inclusion.”
The
settlement resolves litigation pending in the Northern District of California,
styled as In re Pinterest Derivative Litigation, case number
3:20-cv-08331-WHA.
