Owners of National Australia Bank Ltd (ASX: NAB) shares may want to know about a current court case involving the ASX bank share.
According to reporting by the Australian Financial Review, a black, female trader has alleged she was underpaid and discriminated against because of her race and gender.
What's going on?
The AFR has reported Dikele Diawara is alleging she was paid up to $150,000 per year less as a base salary compared to other people in a similar role. She also alleges she was sometimes paid less than "subordinates". Diawara is suing NAB for backpay and compensation.
Diawara said she approached the NAB global head of repurchase agreements (repo) in 2017 after she became aware that two men were earning US$250,000 (or A$337,000) per year. This was more than her base salary of $200,000 per year.
It was reported Federal Court Justice Melissa Perry has ordered the ASX bank share to disclose some of its employees' base salaries and incentives, including short-term and long-term bonuses and share-based payments from 1 October 2016 to 31 October 2019.
It's reported Justice Perry has ordered National Australia Bank to provide data for the men named in Diawara's statement of claim who were allegedly being paid more than her, despite having similar, or lesser, experience.
Justice Perry also said NAB would have to reveal remuneration details for its Sydney-based traders at a director level. This includes directors who trade bonds, repurchase agreements, swaps, options, short-term incentives and bills, and collateral. The court has ordered the bank to "provide the same data for associate directors, senior associates and heads of trading and repo desks globally", according to the AFR's reporting.
NAB will also be required to provide the documents about how Diawara's remuneration was set and benchmarked since she started as a director of repo in Australia in 2016.
The AFR also reported that Diawara alleged the NAB trading desk had a "boy's club culture" and that the head of trading carried a baseball bat. NAB acknowledged that trading head Tim McCaughey carried a baseball bat but that it was "fidget toy" — not "brandished" — and that he "behaved the same way towards all employees, not only women".
What does this mean for NAB shares?
The NAB share price fell by 2.14% on Thursday, though the share prices of other the other big four ASX bank — Commonwealth Bank of Australia (ASX: CBA), ANZ Group Holdings Ltd (ASX: ANZ), and Westpac Banking Corp (ASX: WBC) — also fell by a similar amount.
As we can see on the chart below, the NAB share price has declined 11.5% since the start of the year.
The court case may not affect NAB in the grand scheme of things, but it isn't helpful for the ASX bank share's reputation.
The AFR reported some details of NAB's defence. The ASX bank share said it paid Diawara less than the man she replaced in the Sydney role because she was promoted from a more junior position. It also said the men whose pay she alleges was larger than hers performed more complex roles.
Reportedly, the case has raised questions about the culture on the trading floor and has "prompted a stern warning from chief executive Ross McEwan", according to the AFR.
NAB wants to narrow its gender pay gap to less than 10% by 2025, after being at around 16% in the last financial year.
