Bank of America CEO Brian Moynihan and Citigroup CEO Jane Fraser greet Rep. Al Green, D-Texas, off camera during the House Financial Services Committee hearing titled Holding Megabanks Accountable: Oversight of Americas Largest Consumer Facing Banks, at the Rayburn Building on Wednesday September 21, 2022.
Tom Williams | CQ Roll Call, Inc. | Getty Images
Tech stocks have been humiliated after years of outperforming, and now the recent leaders have suffered another setback: losing the top spot in the 2023 Just 100 list, an annual analysis by the nonprofit Just Capital on the issues the Americans say is on most important when it comes to corporate governance.
Bank of America ranks #1 on the 2023 Just 100 list, and it’s not the only one among its peers. Banks made the biggest gains of any sector in the Just 100 this year as an increased focus on labor issues, and wages in particular, buoyed financials. In last year’s list, the top four spots all went to technology companies.
It is the first time in the list’s seven-year history that a bank has ranked first.
Martin Whittaker, founding CEO of Just Capital, said It was a bit of a surprise that the banks were doing so well.
“They employ a lot of people who are cashiers and not in a technical ‘high-wage’ category, and they have a lot of physical assets, a high physical footprint and a high environmental footprint,” Whittaker said. “And big banks have tended to be mired in controversy, which Bank of America isn’t free of, but you have a lot more consumer-centric issues, and where they’ve failed historically is that breadth of issues that your big tech traditionally didn’t have,” he said.
But banks have been on an upward trend in recent years. “To all appearances, Brian Moynihan is an authentic ‘righteous’ business leader,” Whittaker said. “Banks have been consistently upping their game and that’s the standout,” he said of this year’s Just 100 list. “We’re feeling pretty good because I remember early on in rankings we were given a list of tech companies and people were like, ‘They’re rich, so they can afford all this.’
Just Capital surveys the American public annually and adjusts its methodology for the list based on the priorities identified by the public. Paying a fair, living wage remains the top priority issue for the third year running, accounting for 21% of company valuations in 2023, and it has more than doubled from 9% in the last three years. While environmental, social and governance analyzes have been politicized, the Just Capital survey finds broad consensus across all demographic and political cohorts – liberal, conservative, high-income, low-income, male, female, younger generations, older generations and white, Blacks , and Hispanics – in issue #1.
It’s the final element of the living wage metric – which rates companies based on salary from CEO to average wage of workers; wage violations; subsistence level; wages compared to industry peers; employee compensation; pay equity; and minimum wage – where the banks made the big strides in 2023.
The disclosure of a nationwide minimum wage for all employees, a new data point added to the list this year, accounted for about half of average rank gains for banks in 2023. Bank of America had the second-highest minimum wage of all 951 companies in the Russell 1000 surveyed, at $22 an hour. (Bank of America has also committed to further increasing its minimum wage to $25 an hour by 2025, but that was not reflected in the ranking.) The highest published minimum wage is from First Republic Bank and is $30 -dollars per hour. It rose to No. 71 from last year’s No. 374, making it the cut for the Just 100 list.
Overall, only 9% of Russell 1000 companies disclose a minimum wage.
What the rise of Bank of America means
For Bank of America, the rise from No. 5 last year to No. 1 comes after a climb over the past five years, from No. 104 in 2018 to No. 5 in 2022.
Even as it lost the top spot as the American public became increasingly focused on workers – and at a time when the big tech companies are more likely to be shedding than hiring – the overall tech industry didn’t see a significant decline on the list. On last year’s list, the top four spots all went to Tech, led by Alphabet. This year’s top 10 also included five technology companies: NVIDIA, Microsoft, Hewlett Packard Enterprise, Apple and Intel. Alphabet fell to 12th place.
But banks were the most represented industry in the Just 100 this year: 14 companies, or 34.1% of banks, in the Russell 1000, up from six companies in 2022. The eight banks joining the Just 100 compare to an average of all other industries, one or two companies entering or delisting each year.
It wasn’t just wages that boosted the banks. Domestic jobs and job creation, the second most important theme in the annual rankings, was an area where banks saw an average rank gain of 127 places.
“Bank of America is a bank with branches across the country and it appears more in American main street life than big tech companies, and that alludes to the narrative that this isn’t just the realm of advanced technology,” Whittaker said.
Other employee metrics that helped Bank of America: It offers its employees a comprehensive benefits package, including 16 weeks of paid parental leave for primary and secondary caregivers (one of 10% of Russell 1000 companies that offer at least 12 weeks of paid leave for both caregivers ), flexible working hours and replacement care. It conducts pay equity analysis and publishes its findings, one of only 14% of companies in the Russell 1000 to do so. And it’s among the 34% of companies in the Russell 1000 that disclose detailed workforce demographics by race and gender.
In addition to the top spot, KeyCorp gained more than 200 spots and finished at #70; Ally Financial climbed nearly 300 spots to 66th; and Truist Financial rose from 99th place to 5th place overall in this year’s ranking.
“Bank of America has always been a leader in stakeholder engagement and a leader in moving the industry forward,” Whittaker said.