What the U.K.'s Gender Pay Gaps Say About Returns

(Bloomberg Gadfly) -- Every day that draws closer to the April 4 deadline for British companies to declare their gender pay gaps brings a pickup in the number of reports on file, and these cement the sad truth that men tend to get paid more than women.

Only about a fifth of the companies who must submit their wage data have done so. Of the approximately 1,800 entities that filed as of Friday, fewer than 100 were listed companies or their subsidiaries.

For these entities, which are subject to much greater public scrutiny, it is stark how men dominate the upper-middle and highest pay quartiles. Though there are variations across industries -- finance tends to have bigger gaps, and consumer staples smaller ones -- U.K. Plc is very much the purview of men. 

This raises the question of whether there's any connection between gender pay gaps and performance, as measured by total returns. The data submitted so far show little relationship between the two. This suggests that leadership by men is not a prerequisite for good performance -- the companies in both scatterplots show returns ranged from the truly dismal to the marvelous. 

These charts show a roughly flat relationship of pay gaps and total returns on a one-year basis...

...and on a five-year basis.

This analysis is preliminary. Thousands more U.K. companies have yet to report, and the picture could change as new data come in.

But it's not too soon to consider why there are so few women in positions of power. Companies have commented on their commitment to advancing women alongside their damning government-mandated pay-gap reports.

However, women are less likely than men to be pushed to take on more responsibility, or compensated for doing a good job, according to a YouGov survey. And, they're more likely to face questions on their commitment to their employer.

Given the new transparency in pay reporting, perhaps now there's scope for seeing measurable improvement in the number of women taking charge at British companies.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Elaine He is Bloomberg Gadfly's data visualization columnist in Europe, focusing on business and markets coverage. Before joining Bloomberg, she was a graphics editor at the Wall Street Journal and the New York Times.

1. A note on chart methodology: Where U.K. companies report across a number of subsidiary entities, we use the combined figures where possible. Where an aggregate pay gap figure is unavailable, the wage data for subsidiaries is considered alongside the performance of their parent companies.

To contact the author of this story: Elaine He in London at ehe36@bloomberg.net.

To contact the editor responsible for this story: Jennifer Ryan at jryan13@bloomberg.net.

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