Pay gap in U.K. improving a bit, but execs admit more needed

The U.K. gender pay gap slightly improved across some money management firms in the last year, but executives admitted there is still more work to be done.

While the coronavirus pandemic has caused huge disruption to businesses around the globe, U.K. money managers did not let it get in the way of reporting their third set of gender pay gap data to the government.

And they didn't even take advantage of a suspension of the reporting deadline, granted by the government in March because of COVID-19 pressures on businesses. Firms were originally due to report and publish their figures by April 4, but this year's reports were not required at all.

U.K. companies employing more than 250 people must publish and report figures relating to the gender pay gap — the difference between the average earnings of men and women and expressed as a percentage relative to men's earnings. The requirement has been in place since 2017. The 2019-2020 reports detailed data as of April 5, 2019.

A sample of 10 of the U.K.'s largest money managers, analyzed by Pensions & Investments, on the whole showed slightly improved median pay gap figures, ranging between 14.2% at Vanguard Asset Services Ltd. and 40.6% at Wellington Management International Ltd.

"As a firm and an industry, we are aware that we have still a long way to go and that meaningful change will take time," said a statement by Allianz Global Investors, where the median pay gap was 26.3% in the latest report, down from 27.8% in the 2018-2019 submission. "And we are actively working to address our role-representation gap, as well as inclusion and diversity more broadly, through targeted actions." These include ensuring equal reward and personal development opportunities, and providing "an agile working environment. We remain committed to improving our gender balance throughout the firm and are confident that, over time, our plans and initiatives will help us achieve sustainable change," the statement said.

AXA Investment Managers' median pay gap improved in the 2019-2020 reporting year to 24.9% from 26.9% a year earlier. The firm is "fully committed to closing our pay gap," said Amelie Watelet, chief transformation officer and global head of human resources and communications in Paris.

Among the firms in the sample, there were a number of new and ongoing efforts to help close the gender pay gap.

Among Europe, the Middle East and Africa-based initiatives at J.P. Morgan Asset Management is a commitment to achieve 30% senior female representation — at managing director or executive director level — by 2023 under the U.K. Women in Finance Charter. J.P. Morgan is a signatory to the charter, which asks firms to set internal targets for gender diversity in senior management. There are also targets for each of the firm's businesses, a spokeswoman said.

State Street Global Advisors reported a median pay gap of 20.6% — widening from 17.5% a year earlier and 11.8% in the 2017/2018 report.

The mean pay gap widened to 33.6% from 30.9% in the previous report, "due to a small number of male appointments to more senior and higher-paying roles," said Jacinta "Jess" McNicholas, EMEA head of State Street Corp.'s global inclusion diversity and corporate citizenship department.

"Although we are not yet where we want to be from a gender diversity standpoint, we firmly believe that being transparent about our current state and where we have more work to do is an important part of holding ourselves accountable. We are committed to inclusion and diversity because we know that both are key components of a high-performing organization. We are continually reviewing and measuring our practices to ensure that we are building a culture of equality and fairness within the organization," she said.

A number of initiatives are underway at State Street to achieve this, including a European leadership empowerment and acceleration program, launched in 2019. The program is for "high-performing female assistant vice presidents and vice presidents. Aimed at increasing the number of women at senior levels of the organization, participants receive formal training, mentoring and learning opportunities.

And Vanguard Asset Services, which submitted its report at the beginning of March, recently introduced a new learning program for employees that focuses on "cultivating diversity and inclusion," a spokeswoman said.

The firm also launched a "diversity and inclusion toolkit" to use in applying diversity across business practices, including recruitment, development and retention.

The programs, which "continue in a digital fashion given the current environment, will continue to have success in increasing female representation in senior roles, which will further reduce the gender pay gap," the spokeswoman said. Vanguard had the lowest median gender pay gap in the sample, at 14.2%, down from 18.1% in the 2018-2019 report.

At the other end of the scale, Wellington had the biggest median gender pay gap in the sample at 40.6%, although that improved from 43.4% a year earlier.

"We believe that diversity of talent and thought are central to our mission of delivering world class investment and service outcomes to our clients, and we remain committed to achieving greater levels of diversity and gender balance within our organization," a Wellington statement said. "Whilst we are pleased that we are beginning to see an improvement in our gender pay gap numbers, we acknowledge that we have further to go. We remain committed to the multiyear initiatives underway and are confident they will continue to translate into steady improvement over time."