The gender pay gap exists at the top level of UK business, with FTSE 100 companies paying female CEOs less than half the amount received by men in the same role.
Working closely with The Sunday Times, new research conducted by the Chartered Management Institute (CMI) shows the average female chief executive received total pay equalling £2.6m last year – including all bonuses, pensions and perks – compared to the £5.8m paid to male CEOs at FTSE 100 firms.
It means that the gender pay gap between business leaders is a staggering 55%, when a like-for-like comparison is made. Previous gender pay gap data looked at the average salaries of men and women across organisations, and was seen to be skewed by the greater number of men in senior positions.
The CMI data reveals pay differences exist between men and women in other executive roles, too. Female chairs traditionally make 77% less than male chairmen, while female finance directors earn 45% less than their male counterparts.
ARE HIDDEN EXTRAS FUELLING THE PAY GAP?
The research also shows that the gender pay gap is increased by bonuses and other rewards. The difference in base salaries of male and female FTSE chief executives is 11.6%. When bonuses are included, the gap rises to 35.9%, and then 74.7% when long-term incentive plans (LTIPS) are factored in.
Ann Francke, chief executive of the CMI, is leading calls for a transparent rewards system for both genders.
“This shows the scale of the challenge we continue to face, and the painfully slow progress being made. We know the average gender pay gap reported in the UK is about 15% so it’s shocking to see this gap at least triples among the top three roles,” she explains.
“It is also concerning that the gap is driven by the more opaque parts of pay, such as bonuses, LTIPs and perks and calls into question how these are calculated.
Stakeholders should take action. “Given the evidence that firms with balanced leadership teams outperform their non-balanced competitors, shouldn’t investors be up in arms over these discrepancies in female pay as well as the lack of female representation at the top?”
CMI PUSHES FOR MORE FEMALE MANAGERS
CMI offers various resources – including Blueprint for Balance and CMI Women – to help businesses to boost equality and support the rise of female leaders.
The powerful CMI Women network of male and female managers commissions research and lobbies employers and government to meet gender diversity targets. The Blueprint for Balance platform also gives tips on how to close the gender pay gap at their workplace.
The latest research underlines the importance of these schemes, with females heavily underrepresented at the top of organisations. Indeed, there are only seven female CEOs in the FTSE 100.
Proponents of pay-transparency legislation say it creates accountability, and remedying pay gaps in individual organisations starts with understanding how dramatic they are. Overall, the picture is clear: women who work full-time in the US still only earn around 83% of what men do, a figure that has hardly moved in recent years, and black and Hispanic women earn less than white women.
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