Goldman Sachs posts average pay gap of 55.5% (&72.2% for bonuses)

Goldman Sachs posts average pay gap of 55.5% (& 72.2% for bonuses)

Spare a thought for the vehement pay-gap deniers of the world. They are occupying territory that is becoming increasingly rickety with every passing day.

Refuge for those people who have argued vigorously, unencumbered by data or facts, for years that any pay gap that exists between men and women simply comes down women liking less money, not working as hard as men or making different choices, is shrinking.

As the date for public disclosure in the UK fast approaches and every organisation that employs more than 250 people has to face the music and release information – actual numbers – about their own pay gap, a theme is emerging.

Not only is the pay gap real, but in many companies it is gigantic. The chasm between men and women’s earnings in many big companies makes the official 15.3% figure in Australia look negligible.

At Goldman Sachs International, for example, the average pay gap between male and female employees for hourly pay was 55.5%, and 72.2% for bonuses.

Like EY & PwC admitted last week, the pay chasm is explained by the fact women remain underrepresented in senior roles.

Goldman Sachs chief executive Lloyd Blankfein and president David Solomon wrote a joint memo to all staff that identified this is an issue.

“The advancement of women in the workplace – and more broadly the state of diversity at our firm – is top of mind for all of us. While we have made progress in recent years on women’s representation and ethnic and racial diversity, there is still significant progress to be made.”

Goldman Sachs says the “fundamental challenge” is boosting the representation of women at senior levels.

“This is where the real imbalance lies, and requires attention at the earliest stages of recruitment to attract more women to financial services roles.”

Goldman Sachs is not alone. HSBC reported a pay gap of 59% for hourly pay in 2017 while Barclays’ investment bank has an average gender pay gap of 48% while its retail bank has an average gap of 26%.

Deloitte has revealed an average pay gap of 43%, when partner earnings were included.

In all of these instances the figures highlight the discrepancy between men and women’s representation in senior roles: women’s earning overall are far less in comparison to their male peers because there are far fewer women at the top of the tree. But the pay gap is not merely a function of seniority.

Figures from the UK show that the pay gap begins at the graduate level. One year after graduating, women were earning about £1,600 less than their male counterparts, with a typical salary of £18,300, compared with £19,900 for men.

Three years after graduation, the women typically earned £21,800, compared with £24,200 for the men. Five years post-graduation, the figures were £24,500 for the women and £27,800 for the men. And at 10 years? Typical salaries were £27,100 for women and £35,100 for men.

At one, three, five and 10 years after graduation in the UK, male earnings exceed female earnings.

Beyond that it can and does balloon to 40% or higher which we now know definitively thanks to the British PM mandating companies come clean about how much they are paying men and women.

In almost every case where a giant gap has been revealed boosting women in senior roles has been singled out by companies and leaders as the ‘fundamental’ fix. It will be interesting to see how the figures change next year: will these revelations amount to an  impetus for executives to move the dial for women and spare themselves the public humiliation of stalling? Or will it be an annual, painless, wrap on the knuckles that amounts to nothing?

Surely smart chief executives, looking for an easy PR win, not to mention extending a legitimate gesture of good will and equity to their staff, might be inspired to be a bit bold?

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