Report shows financial services gender pay gap impacts bonuses
International Women’s Day – March 8 – is a good opportunity to assess diversity in the financial sector; an industry traditionally renowned for its male-dominated culture, says Emolument.com.
The crowdsourced salary comparison website notes that pressure from shareholders, government regulation, lobbying forces and employees, has forced banks to tackle the issue in order to improve the perception of women in banking, salaries and degree of managerial responsibility. However, it is widely believed that a pay gap persists.
Emolument.com reports that it analysed data from 4,700 UK front office banking and finance professionals to see if it took longer for women to be promoted and if they earned different amounts compared to their male colleagues.
“Our data paints a bleak picture showing that a pay gap still exists in finance, especially visible when looking at bonus payments, and that women are slower to be promoted throughout their career in banking,” the site’s founders report.
Based on 4,700 front office banking & finance professionals working in the UK
The survey suggests that generally gender has little impact on career progression, with women taking no more than six months at most than men to reach managerial positions. A notable exception is the post of managing director (MD), where it takes women two years more than male colleagues to reach the position.
How does gender impact bonuses?
The gender pay gap is most apparent when bonuses rather than salaries are compared. For mergers and acquisitions (M&A), men and women both earn £160,000 (US$225,000) annual salaries, while men’s bonuses are £29,000 higher, while for trading men’s bonuses are typically twice those of their female colleagues.
Based on 615 M&A and Trading professionals with 10 to 15 years of experience
Despite this, women are slightly more satisfied with their bonuses than men, despite being offered lower bonuses, both in M&A and trading. “Women are known to be less likely to ask for pay rises and promotions compared to their male counterparts, the impact of which is visible in both pay and career progression,” comments Emolument.com
“While transparency in pay has come leaps and bounds in the financial services industry since 2008, there is still a clear pay gap between men and women, especially in the more opaque bonus component of remuneration,” said Alice Leguay, co-founder and chief operating officer (COO) at Emolument.com.
“Without formal processes such as the recent [UK] government consultation, it is very likely that banks may not be aware of the pay gap within their own firms until they analyse their pay information. Providing transparency around pay, both for employers and employees is the surest way to encourage professionals to question the gender pay gap and push employers to close it.”