Treasurer Magaziner Secures Major Reforms at Pinterest, Inc. Following Allegations of Gender and Racial Discrimination
Pinterest pledges $50 million for diversity, equity, and inclusion initiatives, a commitment to business goals tied to creating a more inclusive product, and a release of NDAs for former employees
PROVIDENCE, RI – Rhode Island General Treasurer Seth Magaziner today announced the resolution of a lawsuit against Pinterest, Inc. (NYSE: PINS), which was brought by Treasurer Magaziner on behalf of the Employees’ Retirement Service of Rhode Island and other company shareholders. Treasurer Magaziner’s lawsuit contended that officers and directors breached fiduciary duties by permitting executives to foster a culture of gender and race discrimination.
As part of the settlement agreement, Pinterest will pledge $50 million to enforce and fund a holistic set of workplace and Board-level reforms designed to protect employees from discriminatory treatment and to promote diversity, equity, and inclusion (DEI). Combined, these reforms will substantially increase the value of the company for its investors and help ensure its continued future growth, as well as improve the workplace experience for Pinterest’s employees. The settlement is the first of its kind to embrace diversity goals around a company’s product.
“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,” said Rhode Island General Treasurer Seth Magaziner. “This holistic approach will fundamentally support and positively impact Pinterest’s workplace culture in the years to come.”
The settlement’s vast changes place responsibility on the Pinterest Board of Directors (Board) to actively manage and oversee efforts to improve workplace culture and subject both the Board and those efforts to internal and external oversight. The reforms 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.
Goals related to diversity, equity, and inclusion initiatives must also be included in every manager’s performance evaluation and treated as a core competency. A third-party, Secretariat Economists, will examine Pinterest’s employment data across gender and race categories every other year, considering performance ratings, promotion, and compensation and recommending steps to take to maintain equity.
Other key reforms include the release of former employees from non-disclosure agreements (NDAs) who made race or gender discrimination claims, permitting those individuals 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 diversity, equity, and inclusion goals.
Treasurer Magaziner and the Employees’ Retirement System of Rhode Island were represented by the national law firm Cohen Milstein Sellers & Toll PLLC.