Bank bosses could lose their bonuses if they don't hire more women

Janye-Anne Gadhia, chief executive of Virgin Money, conducted the review for the Treasury 

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Bank bosses will have their bonuses on the line if they don’t hire more women in senior roles in a radical move to address gender inequality in the industry.

The proposals to be unveiled by the Treasury on Tuesday are the expected result of a nine-month investigation into banking, which is the sector with the highest pay but also the biggest gender pay gap in the UK.

The measures, first announced in November, are expected to include banks reporting publically on gender diversity, setting their own targets and appointing an executive to oversee gender, diversity and inclusion. They will rely on banks volunteering to comply.

Janye-Anne Gadhia, chief executive of Virgin Money, conducted the review for the Treasury.

Gadhia said in November: “It should be a wake-up call to everyone in financial services that fewer women progress to senior levels than in any other industry in the UK.

“There are many views as to why that might be. Motherhood, remuneration, the ‘old boys’ network’ are all mentioned, but only scratch the surface of an issue that has been hidden for too long."

Female bankers earn 40 per cent less than men on average, according to a study by the UK Commission for Employment and Skills published last year.

The study found that women across all industries earn 19.1 per cent less than men on average.

Discrepancies in pay have been found at every level of a woman's career. Female graduates earn £8,000 less a year than male graduates from the same degree, according to figures by the Equality and Human Rights Commission. 

Female graduates typically start on salaries between £15,000 and just under £24,000 while their male counterparts earn more than £24,000. In law, the gap widens, with women earning £20,000 after graduation and men taking home £28,000.

Laura Carstensen, an EHRC commissioner, said that women should not face these kinds of injustices, especially when data shows time after time girls and women are outperforming males at every stage in education.

“45 years after the Equal Pay Act was brought in to herald an end to gender pay inequality, our research provides clear evidence that the old economic and societal barriers are still prevalent for working women and overshadowing the prospects of our girls and young women yet to enter the workplace," Carstensen said.

 

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