America's 50 Best Companies For Minorities
By Christine Y. Chen and Jonathan Hickman Reporter Associates Elaine LeBlanc, Laura Vanderkam, Karen Vella-Zarb

(FORTUNE Magazine) – How closely does your company's complexion match that of the nation? Every employer in America will respond differently, which is, perhaps, why the question has to be asked. The answers go a long way toward telling you how well your company is adapting to the changing face of the American work force. Are you making the best use of it, in all its polyglot, multihued creative energy? Or does your corporate culture reject anyone who doesn't resemble the portraits in the boardroom? For the 50 companies ranked below, the answer is unambiguous: They have clearly cast their lot with the employee of the future. Each of these companies takes extraordinary care to recruit and retain a diverse work force--even, in some cases, at the cost of throwing over the old culture and constructing a new, more inclusive one in its place.

As in the previous two years, our best companies for minorities rankings are a collaboration between FORTUNE and the Council on Economic Priorities (CEP), a New York City nonprofit research organization. The results were tallied from surveys sent to all of the companies in the FORTUNE 1,000, plus the 200 largest privately held firms in the country; 148 responded. This year we analyzed how companies stacked up against one another in 15 different quantitative and qualitative categories, from what percentage of new hires are minorities to whether the company ties performance reviews and bonuses to diversity goals. We paid special attention to how many minorities are in leadership roles at each company--on the board of directors, in corporate suites, among the top 50 paid employees, and throughout the management chain. This year we also introduced two new criteria: To check on retention, we compared each company's minority turnover rate with that of whites. And to see how thick the glass ceiling is, we examined how well minorities are represented in management vs. in the work force as a whole.

The results of the survey contain some bad news and some good. For the former, look who's missing. Even though New York City and the San Francisco Bay Area are among the most diverse metropolitan areas in the country, Wall Street and Silicon Valley were unrepresented except for Applied Materials, SGI, Sun Microsystems, and J.P. Morgan. The good news is that redemption is possible. Consider the nearly miraculous turnaround of Advantica, the owner of Denny's restaurants. In 1994 the company paid $54.4 million to settle two class-action suits filed by black customers who claimed that Denny's had refused to seat or serve them. What a difference a new leaf makes. In 1998 it was No. 2 on our list; last year it was No. 9, and now it's No. 1. The past year was also good for Avon, No. 20, which named Andrea Jung CEO; she is the first and only minority female to hold that title in the Fortune 500. One more reason for encouragement: Four of our top ten are new to the list, including Levi's, Dole, and Avis. That's a sign that diversity is more than just a passing blip on America's corporate conscience. It has become something to compete on and to be proud of. As it should be.

--Christine Y. Chen and Jonathan Hickman

REPORTER ASSOCIATES Elaine LeBlanc, Laura Vanderkam, Karen Vella-Zarb

Rank 2000 (1999) No. of minorities % minorities Company BOARD OF TOP 50 OFFICIALS 1999 revenues (millions) DIRECTORS PAID AND MANAGERS

1 (6) ADVANTICA 4 of 11 8 33.4% Spartanburg, S.C. $1,735

2 (#) LEVI STRAUSS & CO. 2 of 12 7 35.3% San Francisco $6,000

3 (2) FANNIE MAE N.A. 8 27.6% Washington, D.C. $36,969

4 (4) SEMPRA ENERGY 5 of 16 6 27.9% San Diego $5,435

5 (#) DOLE FOOD 1 of 7 17 36.6% Westlake Village, Calif. $5,061

6 (1) UNION BANK OF CALIFORNIA 4 of 14 6[Of 46] 35.7% San Francisco $2,749

7 (3) PUBLIC SERVICE CO. OF N.M. 3 of 9 9 32.1% Albuquerque $1,158

8 (#) AVIS RENT A CAR 2 of 11 5 25% Garden City, N.Y. $3,333

9 (#) U.S. POSTAL SERVICE 2 of 11 11[Of 68] 30% Washington, D.C. $62,726

10 (7) SBC COMMUNICATIONS 4 of 24 4 26.1% San Antonio $49,489

11 (20) XEROX 2 of 16 10 23.4% Stamford, Conn. $19,228

12 (29) APPLIED MATERIALS 1 of 9 16 26.1% Santa Clara, Calif. $4,859

13 (18) HYATT No 3 35.7% Chicago board $3,400

14 (16) SOUTHERN CALIFORNIA EDISON 4 of 14 4 25.3% Rosemead, Calif. $9,670

15 (#) MCDONALD'S 2 of 16 5 19.8% Oak Brook, Ill. $13,259

16 (42) S.C. JOHNSON & SON 2 of 10 9 10.5% Racine, Wis. $4,200

17 (17) BANK OF AMERICA CORP. 4 of 20 4[Of 52] 25.5% Charlotte, N.C. $51,392

18 (12) CHASE MANHATTAN CORP. 1 of 17 7 26.1% New York $33,710

19 (14) US WEST 3 of 10 6 16.8% Denver $13,182

20 (47) AVON PRODUCTS 2 of 11 8 17.4% New York $5,289

21 (21) BELLSOUTH 2 of 14 6 24.9% Atlanta $25,224

22 (#) WASHINGTON MUTUAL 2 of 18 5 26.3% Seattle $13,571

23 (33) CONSOLIDATED EDISON 2 of 12 4 17.5% New York $7,491

24 (49) PEPSICO 3 of 16 8[Of 51] 14.6% Purchase, N.Y. $20,367

25 (8) LUCENT TECHNOLOGIES 1 of 9 8 20.3% Murray Hill, N.J. $38,303

26 (#) NEW YORK TIMES 2 of 14 8 12.6% New York $3,131

27 (15) FEDERAL EXPRESS 0 of 10 5 28.3% Memphis $16,774

28 (9) DARDEN RESTAURANTS 5 of 11 5 17.9% Orlando $3,458

29 (#) UAL 2 of 12 4[Of 41] 21.4% Elk Grove Township, Ill. $18,027

30 (#) FORD MOTOR 1 of 11 6 14.8% Dearborn, Mich. $162,558

31 (35) UNITED PARCEL SERVICE 1 of 14 6 25.5% Atlanta $27,052

32 (11) ALLSTATE 1 of 10 5 21.7% Northbrook, Ill. $26,959

33 (43) E.I. DU PONT DE NEMOURS 2 of 13 5[Of 54] 13.2% Wilmington, Del. $27,892

34 (28) BELL ATLANTIC 4 of 20 N.A. 20.5% New York $33,174

35 (38) PITNEY BOWES 2 of 11 7 20.7% Stamford, Conn. $4,548

36 (39) SHONEY'S 1 of 9 3 28.3% Nashville $999

37 (13) MARRIOTT INTERNATIONAL 2 of 10 1[Of 49] 21.7% Bethesda, Md. $8,739

38 (41) ABBOTT LABORATORIES 2 of 13 6 13.7% Abbott Park, Ill. $13,178

39 (#) SGI 0 of 6 14 18.3% Mountain View, Calif. $2,749

40 (44) ELI LILLY 2 of 10 6 11.8% Indianapolis $10,003

41 (#) HILTON HOTELS 1 of 12 3 27.8% Beverly Hills $2,150

42 (#) DTE ENERGY 2 of 12 7 12.7% Detroit $4,728

43 (30) SUN MICROSYSTEMS 0 of 7 8 21.8% Palo Alto $11,726

44 (#) SAFEWAY N.A. N.A. 24% Pleasanton, Calif. $28,860

45 (46) SCHERING-PLOUGH 2 of 15 8[Of 51] 17.2% Madison, N.J. $9,176

46 (34) PG&E CORP. 3 of 14 5 16.9% San Francisco $20,820

47 (#) CUMMINS ENGINE N.A. 10 11% Columbus, Ind. $6,639

48 (#) KELLOGG 3 of 13 5 12.2% Battle Creek, Mich. $6,984

49 (31) COLGATE-PALMOLIVE 0 of 8 4 18.5% New York $9,118

50 (48) J.P. MORGAN & CO. 2 of 17 2 14.8% New York $18,110

ASIAN BLACK MINORITIES (% minorities) HISPANIC AS A % OF WORK FORCE NATIVE AMERICAN NEW HIRES*

[1 (6)] 49.9% 4.3% 69% [ADVANTICA] 10.6% 34.7% 0.3% [2 (#)] 58% 6.9% 51% [LEVI STRAUSS & CO.] 9.2% 41.6% 0.3% [3 (2)] 40.2% 9.6% 46% [FANNIE MAE] 26.3% 4.0% 0.2% [4 (4)] 47.1% 7.7% 45% [SEMPRA ENERGY] 11.0% 27.7% 0.7% [5 (#)] 55.6% 38.9% 71% [DOLE FOOD] 1.6% 14.7% 0.4% [6 (1)] 54% 25.9% 61% [UNION BANK OF CALIFORNIA] 8.4% 19.3% 0.4% [7 (3)] 47.1% 0.6% 51% PUBLIC SERVICE CO. OF N.M.] 1.7% 40.7% 4.2% [8 (#)] 48% 6.0% 63% [AVIS RENT A CAR] 25.9% 15.5% 0.6% [9 (#)] 35.7% 6.4% 50% [U.S. POSTAL SERVICE] 21.5% 7.2% 0.5% [10 (7)] 34.4% 3.7% 52% [SBC COMMUNICATIONS] 18.4% 11.7% 0.7% [11 (20)] 28.7% 5.2% 40% [XEROX] 15.4% 7.4% 0.7% [12 (29)] 38.7% 23.5% 45% [APPLIED MATERIALS] 5.6% 9.2% 0.3% [13 (18)] 62.5% 15.3% 60% [HYATT] 21.0% 25.9% 0.3% [14 (16)] 42.1% 8.1% 46% [SOUTHERN CALIFORNIA EDISON] 8.8% 24.4% 0.9% [15 (#)] 19.3% 4.2% 35% [MCDONALD'S] 9.0% 5.8% 0.3% [16 (42)] 11.6% 1.2% 21% [S.C. JOHNSON & SON] 5.8% 4.2% 0.4% [17 (17)] 40.7% 9.2% 52% [BANK OF AMERICA CORP.] 18.7% 12.1% 0.6% [18 (12)] 41.1% 6.4% 46% [CHASE MANHATTAN CORP.] 23.8% 10.6% 0.3% [19 (14)] 17.3% 2.1% 21% [US WEST] 4.9% 9.3% 1.0% [20 (47)] 28.1% 3.6% 27% [AVON PRODUCTS] 15.1% 9.2% 0.3% [21 (21)] 29.2% 0.7% 41% [BELLSOUTH] 24.1% 4.2% 0.2% [22 (#)] 36.6% 10.5% 43% [WASHINGTON MUTUAL] 7.8% 17.6% 0.6% [23 (33)] 32.7% 3.5% 59% [CONSOLIDATED EDISON] 18.9% 10.3% 0% [24 (49)] 24.6% 1.9% 30% [PEPSICO] 12.9% 9.5% 0.3% [25 (8)] 25.2% 8.7% 30% [LUCENT TECHNOLOGIES] 11.2% 4.8% 0.5% [26 (#)] 18.9% 2.7% 23% [NEW YORK TIMES] 11.6% 4.4% 0.3% [27 (15)] 42% 3.1% 56% [FEDERAL EXPRESS] 29.9% 8.5% 0.5% [28 (9)] 35.6% 2.5% 38% [DARDEN RESTAURANTS] 14.3% 17.3% 1.5% [29 (#)] 30.8% 11.1% 48% [UAL] 10.5% 8.7% 0.4% [30 (#)] 23.1% 2.0% 30% [FORD MOTOR] 18.1% 2.6% 0.4% [31 (35]) 34.7% 2.1% 52% [UNITED PARCEL SERVICE] 22.2% 9.8% 0.6% [32 (11)] 27.6% 3.3% 34% [ALLSTATE] 17% 6.9% 0.5% [33 (43)] 19.2% 2.1% 34% [E.I. DU PONT DE NEMOURS] 13.5% 2.9% 0.8% [34 (28)] 27.1% 1.8% 35% [BELL ATLANTIC] 21.4% 3.8% 0.1% [35 (38)] 40.8% 4.9% 51% [PITNEY BOWES] 26.3% 9.3% 0.4% [36 (39)] 42.8% 0.9% 46% [SHONEY'S] 38.9% 2.5% 0.5% [37 (13)] 57.7% 8.1% 61% [MARRIOTT INTERNATIONAL] 25.6% 23.7% 0.4% [38 (41)] 28.8% 8.9% 31% [ABBOTT LABORATORIES] 12.1% 6.8% 1.0% [39 (#)] 22.4% 13.2% 23% [SGI] 3.6% 5.4% 0.2% [40 (44)] 14.8% 4.0% 19% [ELI LILLY] 8.8% 1.8% 0.1% [41 (#)] 57.3% 8.6% 62% [HILTON HOTELS] 21.3% 27.0% 0.4% [42 (#)] 23.8% 1.6% 49% [DTE ENERGY] 20.8% 1.1% 0.4% [43 (30)] 30.1% 22.6% 32% [SUN MICROSYSTEMS] 3.1% 4.1% 0.4% [44 (#)] 31.5% 6.1% 74% [SAFEWAY] 8.3% 16% 1.2% [45 (46)] 24.3% 8.2% 26% [SCHERING-PLOUGH] 10.0% 5.9% 0.2% [46 (34)] 29.3% 10.2% 30% [PG&E CORP.] 6.1% 11.4% 1.6% [47 (#)] 14.7% 2.1% 15% [CUMMINS ENGINE] 10.6% 1.6% 0.4% [48 (#)] 23.6% 2.1% 53% [KELLOGG] 16.2% 4.9% 0.4% [49 (31)] 24.5% 5.3% 38% [COLGATE-PALMOLIVE] 11.7% 7.3% 0.2% [50 (48)] 25.7% 11.6% 27% [J.P. MORGAN & CO.] 8.4% 5.6% 0.1%

N.A. Not available. (#)Not on last year's list. *New hires in 1999.

[ADVANTICA] Once synonymous with discrimination, Advantica's Denny's chain now requires all employees to complete extensive diversity training. Currently, 35% of Denny's franchises are minority owned.

[LEVI STRAUSS & CO.] The clothing manufacturer was one of the first companies to integrate its factories in the South. It also pioneered a program to buy supplies from minority-owned businesses.

[FANNIE MAE] Its reputation for diversity is so widespread (CEO Franklin Raines is the first black to head a FORTUNE 500 company) that it is helping to teach other companies how to be more inclusive.

[SEMPRA ENERGY] Sempra requires its HR staff to evaluate everything from job postings to employee benefit plans to ensure that minorities are treated equally. Supervisors must explain why minority candidates are rejected for promotions.

[DOLE FOOD] A newcomer to the list, the food company boasts a higher percentage of minority managers--almost 40%--than any other company on this list. It's also tops for Asians: Four in ten Dole employees are of Asian descent.

[UNION BANK OF CALIFORNIA] Last year's No. 1 remains the leading bank on our list. A unique partnership with a check-cashing chain and a nonprofit group provides affordable banking services in inner-city locations.

[PUBLIC SERVICE CO. OF N.M.] Though it tumbles a few places from last year, this utility is a leading employer of minorities, especially Hispanics, who make up more than 40% of the company payroll.

[AVIS RENT A CAR] The company leads its industry in the share of total purchasing dollars spent with minority-owned firms. Minorities now make up 25% of managers and receive about 35% of promotions.

[U.S. POSTAL SERVICE] Delivers on diversity by bringing in people of color--about half of new hires are minorities--and helping them move up through special career-management programs.

[SBC COMMUNICATIONS] Reflecting the diversity of its customer base, the telecom giant operates a call center that fields questions in some 20 languages and dialects. It also contributes to special funds that help minority vendors obtain loans.

[XEROX] Despite recent corporate woes, the company continues to excel in diversity. It jumps several spots on our list, with better-than-average minority representation (20%) among its 50 highest paid.

[APPLIED MATERIALS] The maker of semiconductor equipment has pledged $1 million to help close the "digital divide." One current project: a center in East Palo Alto that teaches computer skills to minority students and others in the community.

[HYATT] For the second year in a row, Hyatt leads the list in minority representation, with 62.5% of payroll. Equally impressive: About 35% of Hyatt managers are minorities, up eight percentage points from last year's figure.

[SOUTHERN CALIFORNIA EDISON] One of six utilities and ten California companies on our list, SCE promotes minorities through an intensive seven-month leadership training program designed to advance diverse and talented employees.

[MCDONALD'S] Another newcomer to the list, the fast-food giant leads our list in purchases from minority vendors--27% of all supply dollars. That translates into some $3 billion poured into women- and minority-owned firms.

[S.C. JOHNSON & SON] The packaged-goods company offers full-tuition fellowships to minority MBA candidates. Minority new hires increased by five percentage points, helping the company leap 26 places on this year's list.

[BANK OF AMERICA CORP.] The bank is feuding with the Labor Department over allegations of discriminatory hiring at NationsBank, a corporate ancestor. Diversity is balanced at the company, with Asians, blacks, and Hispanics represented fairly evenly.

[CHASE MANHATTAN CORP.] Chase, long an advocate of diversity training, is launching an optional course called "The Power of Small" that aims to expose the many small ways minorities are made to feel excluded from the corporate mainstream.

[US WEST] Under CEO Solomon D. Trujillo, a Hispanic, US West has long been a leader in diversity. But Trujillo has said he will leave once US West merges with Qwest, and many advocates fear diversity will fall by the wayside.

[AVON PRODUCTS] Asian-American CEO Andrea Jung surrounds herself with a diverse cast of lieutenants, including Hispanic executives Fernando Lezama (Asia Pacific executive VP) and Pablo Daly (Latin American senior VP).

[BELLSOUTH] This regional Bell hangs on to its rank by increasing percentages of minority officials and new hires. CEO Duane Ackerman last year led an NAACP campaign to raise funds for the group's outreach programs.

[WASHINGTON MUTUAL] The banking company is the leading lender of conventional (i.e., nongovernmental) mortgages to Hispanics in California. It targets the Latino community and staffs facilities with bilingual lending officers.

[CONSOLIDATED EDISON] The utility strengthened its ties to the National Action Council for Minorities in Engineering by naming the advocacy group's CEO to its board. Minority new hires are up 22 percentage points from last year.

[PEPSICO] As Coke deals with charges of discrimination, this rival beverage maker climbs 25 spots by adding two minority board members and spending 5% of its procurement budget with minority- and women-owned businesses.

[LUCENT TECHNOLOGIES] The telecom-equipment giant aims to give minority students skills and experiences their competitors in the job market may lack. A summer research program ends in formal presentations to Bell Labs bigwigs.

[NEW YORK TIMES] The publishing company debuts on our list with strong minority representation on its board and among its highest paid. But people of color make up only about 13% of officials and managers--low for our top 50.

[FEDERAL EXPRESS] The shipping company has a strong track record of home-growing minority talent through programs like mentoring. There's room for improvement, though. FedEx still doesn't have any minorities on its board of directors.

[DARDEN RESTAURANTS] Multilingual menus and training manuals make the restaurateur friendly for minority customers and employees alike. It leads our top 50 in board representation, with five minorities on the 11-member panel.

[UAL] United Airlines is the sole commercial carrier on our list. A third of United's employees are minorities, but only 10% of the powerful pilot corps are aviators of color.

[FORD MOTOR] Senior executives of the company meet with groups representing black, Asian, and Hispanic employees to get feedback on diversity efforts. An executive council makes sure diversity is factored into business initiatives.

[UNITED PARCEL SERVICE] UPS teaches managers about diversity by sending them to communities very different from their own. Executives team with nonprofit agencies that work with disadvantaged youth, migrant farm workers, or the homeless.

[ALLSTATE] Over the past five years the insurance company has doubled its number of minority executives. Proof that diversity is good business, Allstate is the largest insurer of African Americans and Hispanics.

[E.I. DU PONT DE NEMOURS] Du Pont offers its executives refresher courses on diversity management. And while employee networking groups aren't new, Du Pont boasts a remarkable 100 such employee clubs, including an association for black women.

[BELL ATLANTIC] The telephone company, which is merging with GTE to become Verizon, offers training sessions to help its minority vendors build e-commerce sites. It also tries to match its biggest prime contractors with its minority suppliers.

[PITNEY BOWES] At the postage-meter maker, diversity dates back to the 1940s, when the company's chairman penned a memo urging managers to hire a work force that reflected the communities in which it operated.

[SHONEY'S] Earlier this year a federal judge sprang the restaurateur from a consent decree tied to a discrimination settlement. The judge credited Shoney's for exceeding goals in diversity training, hiring, and promoting minorities.

[MARRIOTT INTERNATIONAL] Though it still has a small number of highly paid minorities, the hotel chain boosted its percentage of minority managers and officers. Employees give thumbs-ups to the English courses the company offers.

[ABBOTT LABORATORIES] Through a partnership with the University of Illinois, the drugmaker's scientists mentor rural minority students. Almost 40% of the company's summer interns are people of color.

[SGI] The company recently kicked off the National Association of Black Engineers convention by bringing together local chapters, students, and executives for a rap session on job hunting and mentoring at its offices.

[ELI LILLY] Executives serve as mentors to Lilly's minority vendors, offering business advice. After retiring the job title of director of diversity, the company is now bringing it back.

[HILTON HOTELS] One indication of the clout diversity has here: Senior diversity VP Dorothy Hayden-Watkins reports directly to the CEO. As in other service firms, diversity is especially marked at the entry level. Some 62% of new hires are minorities.

[DTE ENERGY] The energy holding company ties executive incentives to meeting supplier diversity goals. The results are impressive: Business with minority-owned supply companies is up 500% since 1989.

[SUN MICROSYSTEMS] One of only a few Silicon Valley companies to make the list, Sun is now expanding its college recruiting beyond black institutions to include Hispanic schools as well.

[SAFEWAY] An astounding 74% of Safeway's new hires last year were minorities, the highest recruiting rate on our list. Maybe it's because the grocer ties compensation to minority recruitment and promotion.

[SCHERING-PLOUGH] With a Hispanic near the top (President and COO Raul Cesan), the drug company boasts solid minority representation among the 50 top paid. It also showed improvement in the percentage of managers who are minorities.

[PG&E CORP.] The utility holding company was the only major corporation to publicly oppose California's Proposition 209, the referendum that ended affirmative action in the state. A fast-track management program helps minorities advance.

[CUMMINS ENGINE] Diversity is an international affair at Cummins: All offices, in 14 different countries, have a diversity council that addresses minority issues specific to the geographic location.

[KELLOGG] Cuban-American CEO Carlos Gutierrez ties managers' performance evaluations to their support for diversity. Top ranks remain homogeneous, though, with minorities making up only 12% of officials and managers.

[COLGATE-PALMOLIVE] The purveyor of consumer products credits the cultural and geographical diversity of its employees with helping it build a strong brand internationally. Indeed, most of the company's sales come from outside the U.S.

[J.P. MORGAN & CO.] The only Wall Street company on our list. Some of the investment bank's coolest diversity initiatives are grassroots, such as a series of "fireside chats" that black managing directors host at their homes.