Emily Kramer joined the Silicon Valley company Carta to build up the company’s brand. Now, the company’s former VP of marketing is looking to shine a light on Carta for another reason: in a new lawsuit against Carta, which makes equity management software, Kramer accuses the eight-year-old outfit of gender discrimination, retaliation, wrongful termination, and of violating the California Equal Pay Act.
Carta declined an interview request today, saying through a spokesperson that it isn’t commenting because the suit is a “pending legal matter.” But we spoke earlier this afternoon with Kramer, who has separately outlined her side of the story in detail in a Medium post, where she accuses the company of both unfair labor practices and of being disingenuous in its stated “commitment to transparency and equality in equity.”
The equality piece is certainly the bigger of the two issues, by Kramer’s own telling. She says she learned that she was underpaid when, in the summer of 2018, roughly six months after she joined Carta, it partnered with the women-led investment collective #ANGELS to produce a report that highlighted ownership of venture-backed companies’ equity by gender.
The suspicion driving the report — and later proved out by its findings — is that as with salary, where women continue to earn less than their male peers, they are also given less equity ownership in the startups for which they work. Kramer, who says she spearheaded the effort, posted the report, which included internal analysis that showed that Carta too, was allocating less equity to women than men.
In response, says the report, 40% of the women at Carta received an equity fix, compared to 32% of the men.
Perhaps unsurprisingly, Kramer, the only female executive at Carta at the time, says she discovered she was herself underpaid by $50,000 relative to her peers, and that her original equity grant was one-third of the same amount of shares paid to comparable employees, who she says were all men.
Indeed, at the crux of her suit against Carta is that equity grant. While on the heels of the report, the company bumped up her pay by $50,000 and provided her nearly 300,000 more stock options in addition to the 150,000 options she was originally provided, it declined to backdate or accelerate the options to account for the previous six months of her tenure.
That might not seem like such a big deal. But given Carta’s ever-soaring valuation — it was marked at half a billion dollars when Kramer joined the company and it was more recently assigned a $3 billion valuation by its investors — that’s tantamount to a “significant” amount money, notes Kramer. And she wasn’t about to leave it on the table.
The disparity wasn’t a complete shock to Kramer, who’d previously worked in marketing at Ticketfly, Asana, and Astro Technology (acquired by Slack) . According to her lawsuit, filed by attorney Sharon Vinick, Kramer emailed Carta’s founder and CEO, Henry Ward, when she was initially offered the job, noting that the equity offered was “lower than my expectations.”
According to Kramer, Ward told her that any more equity would be “unfair,” as compensation at her level was uniform for all employees. He also said Carta planned a company-wide review of its salaries and stock options later in the year, and that if it revealed that she was being underpaid, her compensation would be adjusted.
Clearly, Ward and Kramer have different views on whether or not that ultimately happened.
In our call with Kramer, she said still believes in the company’s mission to make equity more understandable for its users and that “therefore I believe it’s a solid product.”
She declined to say whether she has exercised any of her shares, but she said that Carta gives its employees a longer window to do this than many other startups. (How much time is is based in part on their tenure with the company, she’d added.)
Kramer also said that she hopes the company can “live up to” how it markets itself externally, as an ally of women who are paid less for the same amount of work.
Kramer says her experience inside of Carta — which still has an exclusively male board of directors — was not of a company that values women as much as men. She alleges that not only was she the only woman who reported directly to Ward during her tenure, but that two other VP-level execs who joined at roughly the same that she did were promoted to C-level positions despite having “less, and less relevant” work experience in their respective fields whereas her efforts to be promoted went nowhere. (Asked if there were other VP-level male colleagues who were also not promoted during the same period, Vinick said that no one at the time had a comparable role to Kramer, who grew to oversee 27 other people.)
Kramer adds that she stopped being included in meetings where a marketing head would normally be included, fundraising meetings among them, and believes that her efforts to remedy what she perceived as a “sexist culture” within the male-dominated company were at the root of all of these developments.
Eventually, Kramer says, she felt she was forced to resign after a meeting with Ward turned heated and he said Kramer was in violation of the company’s “no asshole policy.” When she wrote him two days later to resign, he wrote back within eight minutes, accepting her resignation and suggesting that both might learn from their experience working together.
Vinick, Kramer’s attorney, tells us Carta is being sued for emotional, punitive, and economic distress and says that now that her law firm has filed the suit, Carta will be served officially with the complaint within another week or two, at which point the discovery process can begin.
Carta does not ask its employees to sign arbitration clauses in their employment agreements, so unless it settles with Kramer or a judge finds some reason to dismiss the case, which seems unlikely, it could eventually head to trial.
In the meantime, the decision to sue is a big gamble for Kramer, but Vinick says she is proud of her client. “Standing up to these situations is an extraordinarily difficult and potentially career-limiting move to take,” but will ultimately help “shine a light on the problem of this equity gap.”
Carta has raised more than $600 million from investors to date, including Andreessen Horowitz, Lightspeed Ventures, and Goldman Sachs.
In April, as it was sealing it up its newest round of funding, it also conducted its first major layoff, parting ways with 161 employees. At the time, Business Insider spoke with eight former employees and one investor who described Carta as a “quickly changing company with huge vision but little focus, where hiring and hypergrowth” had become its core priorities.
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