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Analysis-HSBC, Goldman gender pay gaps widen in UK as finance makes slow progress

Published 04/04/2023, 01:55 PM
Updated 04/04/2023, 02:22 PM
© Reuters. FILE PHOTO: People walk over London Bridge towards the City of London financial district during rush hour in London, Britain, October 3, 2022. REUTERS/Henry Nicholls
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By Iain Withers

LONDON (Reuters) - HSBC, Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and Standard Chartered (OTC:SCBFF) reported a widening in the gap between what they paid women and men in 2022, according to data reviewed by Reuters.

The data also showed that, at the banks which detailed their pay gaps by ethnicity, the gap was widest between Black staff and their white colleagues.

The numbers show how far financial institutions have to go to close pay differentials, despite a global push by national authorities and investors to tackle inequities.

Businesses with more than 250 employees in Britain must disclose the difference between the pay and bonuses of male and female staff. They had a deadline of April 4 to disclose data for the year up to April 2022.

Several major finance companies also voluntarily reported ethnicity pay data for the period.

HSBC - already one of the most unequal banks in Britain in terms of gender pay - reported a wider mean average gap for the year, disclosing women were paid 45.2% less than men. This was up from 44.9% the prior year.

The British arm of Wall Street giant Goldman Sachs' gap increased to 53.2% - remaining the largest among major finance employers reviewed by Reuters and up from 51.3% the prior year.

Morgan Stanley's UK arm's gap widened to 40.8%, up from 40.5%, while Standard Chartered's gap increased to 29% from 27%.

All four banks said in their gender pay gap reports that the figures reflected the under-representation of women in senior roles and that they were taking steps to address this.

"I assure you that we are intent on changing this, but of course it takes time," Richard Gnodde, CEO of Goldman Sachs International, wrote in a memo to staff on Tuesday.

The majority of major finance firms nonetheless made progress in narrowly closing their gender pay gaps, according to their disclosures.

The average across 20 of the biggest employers decreased to 30.1% in 2022, compared to 31.7% the prior year.

But this gap remains way above the average across all UK employers of 8.3%, according to official data.

"Organisations think and say they're doing the right thing to advance gender equality in the workplace - but when it comes to taking action ... they are failing to deliver," said Ann Francke, CEO of the Chartered Management Institute.

Experts say that while the gender pay gap data is a blunt tool for measuring disparities - as it does not reflect gaps at the same level of seniority, for example - it can capture broad inequities and affect change.

ETHNICITY PAY GAPS

Half of the 20 finance firms reviewed reported varying detail on ethnicity pay gaps, with some including insurer Phoenix doing so for the first time.

The largest overall ethnicity pay gap disclosed was by UBS at 23%, although this had improved from 24% the prior year. Where data was available across two years, overall ethnicity pay gaps narrowed at the majority of firms.

Where pay gaps were further broken down by ethnicity, they showed the largest pay disparities were between Black and white employees. The widest gap was Deutsche Bank (ETR:DBKGn)'s at 38.4%, though this narrowed slightly on the prior year.

The pay gap between Black and white staff increased at both HSBC and Barclays (LON:BARC) - to 24.8% from 22.9% and to 19.6% from 19.2% respectively.

© Reuters. FILE PHOTO: People walk over London Bridge towards the City of London financial district during rush hour in London, Britain, October 3, 2022. REUTERS/Henry Nicholls

All the employers said in their pay gap reports they were taking steps to improve diversity, particularly at senior levels.

Other firms with disclosures reviewed by Reuters included Lloyds (LON:LLOY), NatWest, Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM) and Credit Suisse, and Aviva (LON:AV), M&G, Admiral, Legal & General, abrdn, St James's Place and Schroders (LON:SDR).

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