In the UK we had 441 employees on the snapshot date of 5 April 2022, of whom 57% were men and 43% were women.
Our analysis shows that the median gap between men and women’s earnings is 20.6%, based on hourly rates of pay at the snapshot date. This is an increase of 3.8 percentage points from the gap we reported in 2021. Our mean gender pay gap has also risen to 11%, from 6.8% last year. The gender pay gap is calculated as the difference between average hourly earnings of men and women as a proportion of men’s average hourly earnings. It is a measure across all jobs in the company, not of the difference in pay between men and women for doing the same job.
The proportion of men and women in more senior, higher-paid roles, has a significant influence on our gender pay gap. At the reporting date for the gender pay gap, 64% of all employees at Senior Manager levels and above (Bands 1 to 5) were men, while at our most junior levels (Band 6 & 7), the majority of employees were women.
Overall, we made progress towards a more balanced proportion on men and women in the workforce in the year to April 2022, with the percentage of female employees increasing to 43% (compared to 41% in April 2021). The proportion of male employees in Bands 6 and above fell over the same period. To date, this trend has continued as we have progressed through 2022.
This imbalance between men and women in more senior roles, while typical of a great many employers in the UK, remains a key area of focus for the Bank. Later in this report, we explain some of the initiatives we are undertaking with the aim of increasing the proportion of women in senior roles, including the good progress reported by the Bank against its Women in Finance targets in July 2022.
However, we know we cannot afford to be complacent. We continue to make sure that our policies and practices are fair. This includes actively reviewing individual decisions around our annual salary, promotion and recruitment processes.
The median gap between men and women’s bonus payments is 25%, which is higher than it was last year.
The 2022 bonus gap reflects bonus payments made in June and August 2021, in respect of the financial year ending 31 March 2021. During this period, 52% of female employees, and 65% of male employees received a bonus. Only employees who joined the Bank on or before 31 December 2020 were eligible, and for both men and women, the proportion of employees receiving a bonus closely reflected the proportion who were eligible for a bonus. The Bank grew rapidly during the bonus year, which is why – for both men and women – a substantial minority of recent joiners were not eligible for a bonus.
There are several factors that can influence the level of an individual employee’s bonus or long-term incentive award.
Both plans incorporate an element that reflects the Bank’s performance as a whole against its strategic objectives, and an element that reflects individual employees’ performance ratings for the bonus year.
Each year we monitor the award of performance ratings carefully to ensure that the distribution of ratings is the same for women as it is for men.
Potential bonus or long-term incentive levels increase for more senior employees as a percentage of salary. While this incentive structure is typical of many employers, it does have a bearing on our bonus gap, as there is a greater proportion of male than female employees at the Bank in senior grades as has been previously noted.
The bonus gap is further impacted by part-time working. Regulations require that bonus calculations include actual bonuses received by employees working part time rather than full-time equivalent amounts, which means that, for the gender pay gap calculations, average bonus levels for part-time employees are generally lower than they are for full-time employees. Just over 6% of roles at the Bank are part-time and 66% of these are undertaken by women, so the methodology for calculating part-time bonuses has a higher impact on average bonuses for women than it does for men.
Other factors that influence bonus levels at the Bank are individual employees’ length of service during the year, and the fact that, for senior employees, incentive payments may be deferred for up to two years.
Once an employee’s performance rating for the year has been determined, there is little or no discretion for managers to adjust formulaic bonus or incentive plan outcomes. On this basis, we are confident that our bonus gap is due to structural factors such as the proportion of men and women in senior roles, rather than to any gender-related bias. We remain committed to ensuring that all pay and bonus decisions are free of any form of bias through a combination of line manager training, clear guidance, and robust governance.
The median gender pay gap is the difference between the hourly pay of the median full-pay relevant man and the hourly pay of the median full-pay relevant woman. The median for each is the man or woman who is in the middle of a list of hourly pay ordered from highest to lowest paid.
The mean (or average) gender pay gap is the difference between the mean (average) hourly pay of men, and the mean (average) hourly pay of women.
Hourly pay is the total of salary and any cash allowances paid, before any deductions for tax or salary sacrifice, calculated as an hourly rate. The figure used for the 2022 gender pay gap is the hourly pay for April 2022. Employees who did not receive their normal full pay during that month for any reason are excluded from the calculation.
Bonus for the purpose of calculating the bonus gap is the total bonus and/or long-term incentive paid during the previous 12 months to all employees who were employed on the snapshot date (5 April 2022). For the Bank, this means bonus payments made in June and August 2021 in respect of the financial year ending 31 March 2021, and long-term incentive payments made in August 2021 in respect of the three-year performance cycle that ended in March 2021