U.K. Finance Gender Pay Gap Isn't Bad. It's Worse HSBC Goldman Barclays

(Bloomberg Gadfly) -- It's probably worse than it looks.

Government-mandated gender pay gap reports are rolling in before Thursday's deadline. The inequality is stark for U.K. finance companies -- data last month from Goldman Sachs Group Inc. showed a median gender pay gap of 36.4 percent -- in other words, women earn 64 pence for every pound that men earn.

While the median gives a good sense of where a company is overall, the mean figures will include the outliers -- those with massive compensation deals.

So looking just at the median hourly pay gap can mask just how skewed a company's pay structure can be. The bigger the gap between the mean and the median, the more likely awards for mammoth pay will favor men.

Take HSBC Bank Plc, a division of HSBC Holdings Plc that includes retail operations. Its median hourly pay gap in 2017 was 29 percent, but its mean was 59 percent. That suggests that women are mostly excluded from receiving the biggest compensation packages.

The bonus pay gap is even more worrying. This can be a huge share of compensation in the industry: the average bonus at financial companies was nearly 14,770 pounds ($20,725) in the fiscal year ending in March 2017, but was just over 1,600 pounds across the whole economy, according to the U.K. Office for National Statistics. 

Most of the financial companies we reviewed pay a bonus to a roughly equal proportion of men and women. That the gap is vastly in favor of men can't be explained by a paucity of women receiving bonus pay. 

HSBC Bank does not come out well here. Its median bonus gap is 61 percent, and its mean is 86 percent. Whoever is getting the big bonuses is probably not a woman. 

All companies have had to report the share of men and women at each salary quartile, and Gadfly has already pointed out how for the majority of companies, the most highly-paid quarter of a company's staff are overwhelmingly men. The disparity between the mean and the median suggests there's a substantial skew in favor of men even within that top quartile.

Optional reporting that some companies have submitted supports this conclusion. JPMorgan Chase & Co. said that within its top quartile, the median pay gap is 7 percent in favor of men, and the bonus pay gap is 32 percent in favor. 

HSBC says in its Gender Pay Gap Report that it's "confident in our approach to pay." Its female staff who see the top pay packages as being a long way away may not agree. 

The majority of the U.K.'s gender pay gap reports have revealed such a dire picture that companies' pledges of their commitment to progress can ring hollow. Now that there's some data transparency, at least they can be held to account. 

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.

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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