An unexpected face greeted members of the “Black@Peloton” employee group when they logged on for one of their regular
meetings in October.
Michael Gettlin, a Peloton vice president responsible for salaries, was on screen. He was there to address concerns among the Black employees — aired for weeks in the group’s internal
channel — that some of them were being paid less than the industry standard for their positions and experience.
Gettlin told them that Peloton doesn’t pay below the competitive market rate while he detailed the company’s fairly complex system for “levels” of compensation.
“It’s not a market-based system,” Gettlin said during the 40-minute meeting, describing the factors that determine which level an employee is assigned to, as well as factors like geography and experience that determine an individual’s compensation within each level.
“And so it is entirely possible that two team members could be in the same level but paid significantly differently,” Gettlin said. But, he noted, two employees at the same level, doing the same work in the same city, should not be paid very differently.
The explanation didn’t assuage the concerns of some employees on the video call, multiple people told Insider.
Peloton says it’s committed to becoming an “anti-racist organization.” The connected-fitness company whose sleek stationary exercise bikes became a pandemic status symbol among homebound techies and bankers, vowed to spend $100 million to fight systemic racism as part of its “Peloton Pledge” in 2020. Among the many bike workouts available on its service are sessions like “Speak Up,” a 30-minute class that combines high-intensity exercise with commentary about racial injustice.
That makes rumblings of unequal pay among Black employees an important issue for management. Indeed, according to Gettlin, Peloton has hired an external consultant to conduct a “pay-equity study” in response to the concerns.
To some people whom Insider spoke with however, the episode reflects an ongoing problem at Peloton: For all the company’s talk of combating systemic racism, its efforts are too often reactive, in response to a crisis, rather than demonstrating a genuine interest in creating an equitable workplace. Four current and former Black employees described personal experiences at Peloton that they said showed a pattern of underpaying certain workers.
“I just had a hunch,” one former employee said. When the employee polled other team members about pay, “the three Caucasian people were all getting paid more than what I started at,” the employee said, noting that one of the people he asked had started six to eight months before him while the other two started several months after him.
More than a year after a George Floyd’s murder triggered a wave of pronouncements from corporations promising more equitable workplaces, the situation at Peloton illustrates how even evidently progressive companies, pledging real money, are struggling to address longstanding problems. Some of the Black employees voiced frustration with other aspects of Peloton, including a promised workforce-diversity report that has yet to materialize.
“None of it is genuine,” one Black employee told Insider in a conversation over a messaging app. “The Black dollar is powerful, and Peloton sees the benefit with aligning themselves with the BLM/Anti Asian Hate stance, but does little to address inequity and diversity concerns internally.”
Insider validated the identities of the current and former employees and also viewed internal documents that discuss how the company determines salary, levels, and promotions. The employees requested anonymity because they were not authorized by the company to speak with the media.
Peloton said in a statement that it is committed to “continuous improvement” as it builds upon its initiatives and processes to ensure equitable compensation and become an anti-racist organization.
“We take this very seriously and encourage constructive comments and feedback within our organization. We’re proud that we have team members who share their thoughts, ideas, and opinions, especially when conversations are hard,” the company said.
Founded nearly a decade ago by John Foley, a veteran internet executive, Peloton’s head count has swelled in recent years, rising from 443 employees in June 2017 to 8,862 employees in June 2021.
According to the company’s annual proxy statement, roughly half of Peloton employees are hourly workers who do things like deliver and set up its $1,500 and $2,500 internet-connected exercise bikes.
Peloton garnered positive headlines in June 2020 when it raised the starting salaries of its hourly employees to $19 an hour, more than $5 above the highest minimum wage in any state.
But the gulf between the company’s hourly workers, many of whom are people of color, and the rest of the Peloton workforce is reflected in the 317-to-1 pay ratio between Foley and the median Peloton employee. According to the company’s most recent proxy filing, Foley earned a total compensation, including stock awards, of $17.8 million in the fiscal 2021 year while the median employee compensation, which includes both hourly and full time employees, was $56,084.
For the 200 or so members of the Black@Peloton group, all of whom are full-time employees, the concerns about pay are not limited to hourly workers. In a discussion that began on the channel in September, Black employees with years of experience as IT professionals shared salaries of $45,000, $51,000, $57,000 to the group, according to screenshots viewed by Insider.
“Although we are a progressive company,” workers at Peloton are still “very much in the dark about what people on their team are making or even a general range of what they should be making,” a departing employee wrote on the channel, urging colleagues to share their pay information.
One group member shared his entire six-year salary history at Peloton’s New York City headquarters. In 2016, his second year at Pelton, he was making between $45,000 and $55,000 as a technical support manager, he wrote.
Later, another Black employee posted that she was being paid $57,000 as a Level 4 professional in the IT department after what she said was 11 years of experience in the field; and a Black Peloton employee with eight years of IT experience said they received an offer of $50,000 which was bumped up to $51,000 after negotiating.
One Black employee was given a 1.5% raise, which equates to an additional $765 a year — well below the 5.3% inflation rate at the time — “after receiving constant praise on my hard work throughout the year,” the person posted in the channel.
“I would say this is a two-part thing. I think Peloton is just extremely cheap when it comes to their internal employees regardless of race,” a current Black employee told Insider. “But when it comes to your front-line workers, people who are in your warehouses, people who are your member-support agents who are taking these calls from actual Peloton bike riders — a majority of those teams are African American.”
When Peloton executives became aware of the conversations on the Slack channel, Dara Treseder, senior vice president and head of global marketing and communications, posted that she was working with Chief Strategy Officer Dion Camp Sanders to escalate their concerns to the people and diversity, equity, and inclusion teams. (Both Treseder and Camp Sanders are co-executive sponsors of the Black@Peloton employee resource group.)
“We hear your concerns on what you are experiencing,” Treseder said in the Slack channel. “It is so important to us personally that Peloton is the best place to work — ESPECIALLY for our Black teammates.”
Foley, the CEO, held an all-hands meeting that same day and dived into the topic of pay. “Generally we pay in the top decile, the top 10% of all companies for similar roles. We’re proud of that,” he said, according to a transcript of the talk viewed by Insider.
Then he zeroed in on stock compensation, saying in the meeting that some employees are on twice-a-year “equity-refresh programs” and others are annual, with stock compensation based on dollar amounts, not number of shares.
“So we try to give you more equity. All of us, everyone at Peloton, we’re trying to get everyone more and more equity,” he told employees.
The equity awards, which Peloton provides to all full-time employees, are a valuable benefit but don’t necessarily help workers who say they need a higher base pay.
“I want to be able to afford to live today,” one anonymous Black employee said. “As you continue to give your hard work and energy to this company, you want to make sure on a day-to-day basis you’re being fairly compensated.”
means some employees’ stock options are underwater, with exercise prices above the roughly $90 Peloton trades at. While Peloton’s stock has increased by roughly three times since its 2019 IPO, the stock’s current price is well below its high of $171.09.
Gettlin told Insider that the company is taking its Black employees’ concerns about pay seriously.
“We’ve met with every team member who has actively come forward to express concerns about pay equity because we take this so seriously,” Gettlin said. “We’ve addressed individual concerns as we do with any other workplace concern.”
And he said the pay-equity study will take place in Peloton’s fiscal third quarter, January to March of 2022.
“This work is still on schedule for that period. We are committed to taking action based on the findings,” Gettlin said.
The company also provided Insider with a statement about its pay system.
“We rely on a combination of local market data, internal base salaries and market conditions. We review and update our compensation ranges annually and, based on the market, we evaluate where team members sit within their range (based on level, job, and location) to determine if they are paid accordingly, regardless of race, gender, ethnicity, or any other protected characteristic,” the company said.
Some Black Peloton employees whom Insider spoke with said the company still had a ways to go to live up to its woke rhetoric. In the heated atmosphere after George Floyd’s murder on May 25, 2020, for instance, Peloton initially hesitated to speak out. As companies like SoulCycle (which posted on May 28) and Netflix (which posted May 30) posted “Black lives matter” on social media, Peloton resisted calls from some of its employees to post something immediately.
“The world has been on fire for 3 days and we have yet to say something and take our stand on the right side of this,” one Peloton employee wrote in the “marketing” Slack channel on May 30 in screenshots viewed by Insider. “I love working here but it’s been infuriating to see the silence from us when we are supposed to be a leader in our industry.”
The company did post on its Instagram on May 31 and announced the $100 million Peloton Pledge in June 2020, which included raising the starting wage to $19 and spending $20 million on “learning and development” programs for hourly workers as well as investing another $20 million in third-party nonprofit groups focused on fighting systemic racism. Peloton did not provide how much of that $40 million has been spent so far, but it aims “to fulfill all of these financial commitments by June 2024” according to a Peloton spokesperson.
The diversity statistics within Peloton have also become a source of frustration to some employees, who say the company has dragged its feet on releasing the information. While tech companies including Salesforce and Facebook now release annual reports about the employee diversity numbers, Peloton has yet to release a report but promised that it will be available next year.
A Peloton spokesperson said the firm is “deeply in the DEI analysis process” and will be sharing its numbers publicly in 2022 once the data is finalized.
“However, we can share that 31% of our senior leaders — VP and above — are people of color,” a Peloton spokesperson said. Like many companies, Peloton’s definition of “people of color” includes Asian-American, Black, Indian/Pacific Islander, Native American, LatinX and mixed race.
The company also said it had signed on in March to the Management Leadership for Tomorrow Black Equity at Work certification, in which companies submit three-year plans to improve Black representation in areas such as leadership, equal pay, purchasing and social programs, MLT says. Peloton will become eligible for consideration for the certification in May, according to MLT’s rules, the company said.
Some Black employees are running out of patience.
A former employee said he was the only Black employee on his team, which grew by more than 20 people in 2020. He left after he asked a few of his white coworkers what they made and found he was being paid $15,000 less for, in his view, the same experience and role.
“It’s just unfortunate because it is a great company to work for aside from all of that,” he said, adding that it’s the “shadow of salary” that made it hard to work for the firm.