Corporate America may be retreating from diversity, equity, and inclusion (DEI) — but Wall Street hasn’t joined the exodus.
When President Donald Trump re-entered the White House in January, several companies responded with sweeping shifts to their corporate policies.
DEI programs, which Trump slammed as ‘woke,’ were among the first to go.
The President’s re-election and consistent activist pressure made cutting DEI programs a popular choice for executives: companies scrapped mandated training, hiring benchmarks, and DEI-linked executive bonuses.
So far the changes haven’t delivered the massive stock gains top bosses wanted. In some cases, they’ve backfired.
Over the past six months, companies that have generated the most headlines for sticking by their DEI programs — including Costco, Levi Strauss, and Ulta Beauty — have posted stock gains.
Meanwhile, several brands that grabbed headlines for ditching DEI — including Ford, Target, and Tractor Supply Co. — are in the red in the same period.
The shifting DEI policies aren’t directly causing the stock changes.
Some of the most visible DEI defenders have posted six-month stock rises, outperforming the bellwether S&P 500. Companies that cut back have lost some ground.
Experts told DailyMail.com the companies that have done well are uniquely positioned to handle the current economy.
But so far, the stock prices are a lesson in brand identity. During a fractious political moment, companies that have leaned into representing their customers have largely outperformed the market.
‘It is fair to push back against how many DEI were implemented or to argue that they became over-invested in over time,’ Steve Dennis, the president of SageBerry Consulting and advisor for dozens of high profile retail executives, told DailyMail.com.
‘But to reject the fundamental merits of diversity, equity, and inclusion is both ignorant and cowardly.’
Ulta Beauty — which is up 2.3 percent — is a great example.
The company has largely maintained its diversity initiatives. For Ulta, the decision to sell makeup while tracking corporate representation for historically excluded groups, like women, resonated with investors.
Meanwhile, the S&P 500 index, often used as a bellwether for the market’s overall performance, has fallen 4.7 percent over the same period.
Ulta’s performance in that time is beating the S&P by seven percent.
Some companies that generated headlines for rolling back DEI have seen sharp losses.
Target is the prime example. The company, which once prominently featured Pride and Black History Month collections, has now seen 11 straight weeks of declining foot traffic.
Target, a brand that offered Pride and Black History Month collections, has pulled back on its internal DEI policies and has faced consumer pushback
Ulta, which markets largely to women, has maintained corporate DEI initiatives
Ford has also seen some stock drops since its DEI change – the company’s stock drop is largely because of expensive automotive tariffs
Costco’s CEO, Ron Vachris, has maintained the company’s DEI posture
A consumer downturn has produced a massive stumble on Wall Street. Target’s stock is down 34.4 percent in the past six months.
Behind closed doors, executives are also facing unexpected support for DEI programs, despite public pressure from the White House and conservatives on social media, CNN reports.
This year, two conservative think tanks called the National Center for Public Policy Research and the National Legal and Policy Center pushed shareholders to vote on scrapping DEI initiatives.
They proposed eliminating DEI programs, removing diversity goals from executive pay packages, and auditing the legal risks of inclusive hiring and retention strategies.
Those movements have largely failed. Nearly every anti-DEI shareholder resolution was overwhelmingly rejected — at Costco, Apple, Goldman Sachs, John Deere, and more.
The results aren’t ideological resistance, experts said. They’re a reflection of confidence in well-established corporate policies.
‘Investors are saying they don’t want ideological shareholders to drive business,’ said Matteo Gatti, a corporate governance professor at Rutgers, told CNN.
In other words, the people who own huge shares — large institutions like BlackRock and Vanguard — still see DEI as good business.
