Male Bonuses Found Key to Gender Gap as MPs Grill Businesses

(Bloomberg) -- Bonus gaps between men and women at U.K. companies are on average twice as big as salary differences, highlighting how the rewards increase disparity in the workplace, according to an analysis of government data.

More than 80 percent of companies that recently reported their gender pay gaps under new U.K. laws have a bonus gap in favor of men, according to a report published Wednesday by accounting firm PricewaterhouseCoopers LLP. At about 55 percent, or roughly 5,500 companies, the bonus gap was more than 30 percent, the review found.

Under new legislation, U.K. companies with 250 employees or more must report the average and median differences in hourly and bonus pay between male and female employees. It has been illegal since 1975 in Britain for companies to pay men and women differently for doing the same jobs, but the gender-pay reporting draws attention to the imbalance in roles: Men monopolize the top jobs, while women dominate the lower-paid positions.

A number of large British companies, including EasyJet Plc, Balfour Beatty Plc and law firm Slaughter & May, were grilled on the issue by a panel of U.K. lawmakers Tuesday. Legislators heavily criticized Slaughter & May’s human-resources director, Louise Meikle, for the firm’s refusal to disclose its partner-pay numbers. While companies don’t have to include partners under the legislation, many have said this is a mistake because it removes the top tier from the data and have released them voluntarily.

Rachel Reeves, chairwoman of the Business, Energy and Industrial Strategy Committee, told Meikle that if she were graduating from a top university now and considering which law firm to work for, she wouldn’t choose Slaughter & May based on what she heard in the session.

About 40 percent of the roughly 10,000 companies that have reported their pay-gap data had an average hourly wage gap higher than the 17.4 percent national average, according to PwC’s report. For about 1,000 firms, the hourly gap was more than 30 percent.

Deceptive Numbers

Financial-services firms reported some of the widest pay gaps, while food and health organizations have tended to show narrower discrepancies. Some sectors’ numbers can be deceptive because they are disproportionately male, according to PwC. The transportation industry, for example, has reported relatively small pay gaps, probably because of a lack of female employees for comparison.

As many as a fifth of the companies that have reported have also been wrongly categorized by the government, according to Jon Terry, PwC’s U.K. diversity and inclusion consulting leader, who worked on the report. Examples include a burger company that has been categorized as a bank, Terry said.

The reporting has led to wake-up calls for some companies as they’ve been forced to acknowledge the lack of diversity among their top ranks. EasyJet U.K. Director Sophie Dekkers told lawmakers only about 6 percent of pilots in the industry are female. The airline itself has 13 percent female pilots and is aiming to hit 20 percent by 2020.

Not everyone thinks the pay-gap reporting is a good thing.

Michael Spencer, the billionaire founder of electronic markets operator NEX Group Plc, told Bloomberg News that British business was “wasting time” with the gender pay-gap reporting, which was “thoroughly misleading,” when it should be focused on limiting the fallout from Brexit.

©2018 Bloomberg L.P.

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