By: Natalie Robehmed
April 11, 2018
Hollywood has a new way of negotiating talent deals — and it seems to be helping women.
A California-wide law that took effect in January prevents all employers from asking potential employees for their salary history. In corporate workplaces, it’s altered the tempo of traditional compensation discussions. But in entertainment, it’s rewritten the playbook for agents and studio executives who have long used quotes to establish pay.
“It’s totally changed how the negotiating process is taking place,” said one agency insider.
An actor’s quote is what they were paid for their most recent gig. Their agent will typically advocate for an incremental increase with each job, ranging from $2,500 to seven figures, depending on the medium, an actor’s experience and popularity. The more work an actor gets, the more they are able to build their quote.
In an industry that fills only 31% of roles with women and 29% with people of underrepresented racial and ethnic groups, such a system benefited those for whom there were many roles to fill — white men. The disparity is even worse behind the camera, where women and people of color occupied just 4% and 8% of directors’ chairs, respectively, according to recent studies by the USC Annenberg Inclusion Initiative.
That has translated to a pervasive compensation disparity between actors and actresses, even at the very top. The world’s 10 highest-paid actors banked a cumulative $488.5 million last year — nearly three times the $172.5 million combined total of the 10 top-earning women.
“[The law] is part of the effort to solve the gender pay gap,” explained employment attorney Ann Fromholz, principal at The Fromholz Firm. “The thinking is that if companies pay people based on merit, there will be more equality in pay, and if they pay them based on what they were making at their previous job, they will be liable to continue pay inequity.”
In the wake of Time’s Up and #MeToo, Hollywood has never been more attuned to wage disparity. Recent bad publicity from revelations of unequal pay between Netflix’s The Crown co-stars and Michelle Williams and Mark Wahlberg in All The Money In The World has turned up the heat. Enter Bill No. 168, which aimed to diminish the pay gap by making it illegal for a studio to ask for the quote of any employee, be they an actor, writer or director.
Previously, a studio would approach an agent with a potential deal and inquire about their client’s quote. The agent would provide the actor’s quote, citing the client’s most recent paycheck on a specific project at a rival studio. The business affairs executive at the prospective studio would then call the previous studio to verify the provided quote was accurate. Negotiations would proceed from there.
Now several agents say they have been able to pull off huge salary leaps for clients, specifically women and people of color, who have been systemically underpaid and underemployed. They cite remuneration increases of between 12% and 20% from project to project — far more than the standard incremental bumps prior to the law’s introduction.
Of course, business affairs executives have developed workarounds. Many have been using careful language to inquire about “salary expectations” or “spheres of pay.” Others with experience are already very knowledgeable about what stars receive and have been impacted minimally by the change.
If an offer comes in far below what the actor normally gets, talent can opt to release their quote by giving their agent written permission to share their salary history. “If they come in much higher than the quote, I keep my mouth shut and counter,” said another insider.
But even when quotes are provided, studios are no longer allowed to make calls to verify them, leaving the potential for more money on the table. “Because they can’t check quotes, you could make up anything you feel your client deserves,” said another longtime agent.
Others have been hurt by the law. Novice business executives using software to track projects in development can miss deals that never made it onto industry databases, such as Studio System, Variety Edge, IMDbPro and The Industry Edge. Without accurate information or previous quotes, some say, the change has led to lower offers, particularly for performers with brief track records. In the most extreme cases, initial deals have been as low as 40% of a client’s quote, according to sources.
“It seems the first reaction from companies is to offer as little as possible and then say, ‘If you want more, you have to justify it,'” said entertainment lawyer Linda Lichter, founding partner at Lichter, Grossman, Nichols, Adler & Feldman. “It has the impact of empowering the companies to be even more aggressive about keeping prices down.”
Some feel the law may backfire for women in corporate workplaces. “One of the reasons that’s always been given for the pay gap is the notion that men are more assertive and better at advocating for themselves,” said employment attorney Jack Schaedel, partner at Scali Rasmussen. “If men are more brash about demanding something, what’s to stop them from saying they make way more to influence [the employer] to pay them more?”
It’s too early to tell whether the law will tip the scales, but advocates remain optimistic that it could help finally achieve pay parity for women and minorities in entertainment.