- Pinterest will invest $50 million into DEI initiatives as part of a settlement with its shareholders, the parties announced Wednesday.
- The company will also no longer enforce non-disclosure agreements when employees discuss mistreatment.
- The shareholders claimed Pinterest breached its fiduciary duty by failing to respond sufficiently to discrimination allegations.
Pinterest is committing $50 million to diversity, equity, and inclusion reforms after a group of shareholders filed suit against its board following claims of a toxic environment for women and Black workers at the company. The terms of the settlement were announced late on Wednesday after market close.
As part of those reforms, the social image-sharing company will not enforce non-disclosure agreements for former employees who speak out about workplace mistreatment or harassment. Earlier this year, Pinterest said that it would no longer require outgoing employees to sign them.
Additionally, Pinterest will designate a member of its board to co-sponsor DEI initiatives alongside CEO Ben Silbermann and undergo audits twice a year to examine pay equity. The company will also set up an office, run by a third party, where employees can go for advice in pursuing complaints.
These measures come as a result of a settlement with three of Pinterest's shareholders — the Employees' Retirement System of Rhode Island, Stephen Bushansky, and Sal Toronto, a trustee of the Elliemaria Toronto ESA — who had filed suit against the company's board of directors last December, claiming that it breached its fiduciary duty by failing to respond sufficiently to discrimination allegations.
Each of the three complainants are smaller shareholders with less than 5% of the company, according to a recent proxy statement. Silbermann, Pinterest's CEO, owns nearly 8% of the company, according to Bloomberg.
Rhode Island's treasurer, Seth Magaziner, who acted on behalf of the state's employee retirement system, announced the settlement. The law firm Cohen Milstein Sellers & Toll PLLC represented both parties.
Pinterest has come under controversy for its treatment of employees and what some have called a "toxic" workplace for women and Black employees. Last year, two Black former employees, Ifeoma Ozoma and Aerica Shimizu Banks, publicly alleged that they were paid unfairly and were retaliated against by their supervisors. Insider spoke with 11 former employees who described an environment in which workers were publicly humiliated and subject to sudden firings.
Later that year, Françoise Brougher, Pinterest's former COO, filed a gender discrimination lawsuit against the company, alleging that she was paid less than male executives and left out of important meetings and events, including the company's initial public offering roadshow. The company paid her $22.5 million in a settlement.
Pinterest's latest settlement with its shareholders codifies several DEI initiatives the company has put in place since the allegations put forth by Ozoma, Shimizu Banks, and Brougher. Last December, for instance, the company announced the formation of an inclusion advisory council, which has representatives from organizations such as the NAACP, The National Transgender Center for Equality, and Asian Americans Advancing Justice.
The company already releases a diversity report, which will now come twice a year for the next two years and annually thereafter, according to the settlement.
Pinterest will now have a dedicated inclusive product team staffed with current employees across its departments. It already has a head of inclusive product and has rolled out several features, such as skin-tone searches, to make its product more inviting to people from different backgrounds.
The company will also pay a set stipend to the leads of its employee resource groups, who will have term limits. Co-presidents of those groups will receive $5,000 per year, and vice presidents will receive $2,500 per year.