Today marks an important day for diversity on Wall Street. Here’s why

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.For the first time ever, every company listed on the S&P 500 has at least one racially or ethnically diverse director. About 11% of S&P boards were non-diverse in 2020. And now, the single most important attribute being prioritized in corporate board director searches is racial and ethnic diversity according to PwC’s 2021 Annual Corporate Directors Survey. The numbers back that up. Half (51%) of all current directors support tying executive compensation to diversity and inclusion goals, a 13 point jump from last year, according to PwC’s 2021 Annual Corporate Directors Survey. Good thing those numbers are finally rising, because today also marks an important deadline for all Nasdaq-listed companies: They must fill out a board diversity matrix that includes the total number of company board members and how those board members self-identify regarding gender, race, ethnicity and LGBTQ+ status. The results will be made public through annual meeting proxy statements or on company websites. Starting in August 2023, companies trading on the exchange must have at least two diverse board members or explain why they are not meeting this diversity objective.  “Because what we measure signals what we value, the stock exchange is sending a huge message on its priorities,” wrote S. Mitra Kalita, the founder and CEO of URL Media and a former CNN executive in a recent op-ed on the importance of board diversity. “Disclosing this information to investors empowers shareholders to support companies that embody their ideals and pull investments from those that don’t,” said Representative Carolyn Maloney, a Democrat from New York who chairs the House Committee on Oversight and Reform, in a statement praising the move. “Beyond making moral and common sense, increased diversity also makes financial sense. Studies have repeatedly found that companies with more diverse leadership are better positioned to succeed.”The 2020 murder of George Floyd by Minneapolis police that ignited Black Lives Matter protests around the country also increased demands for corporate action around diversity and inclusion, said Fassil Michael, head of thought leadership at ISS Governance Solutions. Those demands are being taken seriously, the numbers show. But the numbers don’t show everything. Although 19% of the total US population identifies as Hispanic or Latino, directors in that group make up just 5% of S&P 500 board seats, for instance.”Many boards still do not reflect the diversity of their customer base or the demographics of the broader society in which they operate,” wrote Michael. “While there is cause to celebrate the progress that has been made in recent years, many companies are expected to grapple with board diversity issues — along with C-suite diversity, workforce equity and fair pay — for the foreseeable future, as the long-term trajectory of many corporate diversity and inclusion initiatives has yet to be seen.”It’s not just about boards. New research by McKinsey found that about 75% of all Black and Hispanic employees work frontline jobs like waiting tables, stocking store shelves, or folding clothes, compared with 58% of white workers. And while three out of four of those workers want to be promoted, only one out of four will be. Black workers make up 17% of hourly jobs at major companies, but just 9% of jobs in low-level supervisory roles, one rung up the ladder.  In addition, frontline hourly employees are nearly 20% less likely than corporate employees to believe that diversity and inclusivity policies make a difference, according to McKinsey. Big corporations have enthusiastically embraced ESG incentives recently, wrote Alison Taylor, a professor at NYU’s Stern School of Business and executive director of its Ethical Systems program, and Brian Harward, the program’s lead research scientist.But a lot of what they’re doing “appears to be a self-serving strategy to generate positive PR,” they wrote in a joint statement. The current state of diversity efforts by corporations is “disappointing but understandable … Investors pressurize them into what amounts to a box-ticking, virtue-signaling exercise — and it shows.” Take McDonald’s (MCD), for example. The company announced last year that it would tie 15% of executive compensation to accomplishing annual increases in the share of women and minorities in senior leadership.Sounds great. But at the same time, McDonald’s was accused of mistreating and “redlining” its Black franchise owners, pushing them to the least favorable locations that required expensive and unrealistic renovations, and instituting harsher grading and inspections on their shops. “What encouraged that behavior?” ask Taylor and Harward. “Was there any relationship between the lack of diversity in senior leadership and this litigation? More broadly, why should executives be given bonuses for meeting intrinsic goals that ought to be central to any company’s values and mission?”The company has denied wrongdoing and settled claims that it had treated Black franchisees less favorably. Bad news on Wall StreetEnjoy the good times while you can because they don’t last forever. Last year was a lucrative one for the black fleece vest wearers who work in Midtown Manhattan but call it Wall Street. The streets were glistening in the 2021 version of gold … mergers, acquisitions and IPOs. The economy was back, baby. Covid finally met its match thanks to the hard work of Pfizer, Moderna and Johnson & Johnson. Those Wall Street warriors were working hard, and their pay reflected it. Average bonuses hit a record high of $257,500, up 20% from the year before. That’s on top of very generous base salaries. Then 2022 hit. Covid rates are still at record highs, and shutdowns are roiling supply chains. Inflation, interest rates and a lack of IPOs have hit the finance world hard. M&A activity has fallen by 25% and IPOs have dropped by half since last year. Investment banking revenue at JPMorgan Chase fell by 61% and by 55% at Morgan Stanley last quarter. Now, year-end bonuses are expected to decline significantly. Those who work in finance can expect to see a nearly 50% drop in their compensation, reports my CNN Business colleague Allison Morrow. Read more here. Inflation, the hot new wordWe all know that inflation, at historic highs, has hit our wallets. This earnings season has shown us that corporations have also noticed. There’s been a 26% increase in mentions of “inflation” so far this quarter from the earnings reports of publicly traded companies, according to new data from Cision. That has carried over to Twitter, where “inflation” was mentioned 19,518 times versus 827 times in the same period of 2021. Interestingly enough, “corporate greed” was also a much-used phrase among Twitter users talking about earnings reports, with 9,577 mentions compared to only 8 in 2021.Corporations increased their mentions of “interest rates” and “recession” in this quarter’s earnings reports by 9% and 4%, respectively. But Russia’s invasion of Ukraine, seen as a major headwind last quarter, saw a 77% decrease in mentions as a negative factor this quarter while talk of the pandemic decreased by 17%.Tyson Foods and Palantir Technologies report earnings before US markets open.Also today: NY Fed 3-year inflation expectations are out. Coming tomorrow: Sysco, Coinbase and Hyatt report earnings.