The gender compensation gap in financial services is well-documented, and it appears that it also extends to the Big Four professional services firms.
Female auditors and accountants who work at PwC in the U.K. earn 14% less than their male counterparts on average and get significantly smaller bonuses – 40% smaller, in fact, according to data provided by the firm.
Why would PwC spill the beans on that fact? It was following the law. It’s only the 19th U.K. company to comply with new British government rules requiring organizations to disclose wage differences between men and women, the Financial Times reported. The goal is to call attention to workplace inequality in the hopes of eventually ending it.
The professional services firm has more than 19,000 U.K .workers, and it is one of the largest businesses to join the British government’s mandatory “gender pay gap” register of public and private companies with at least 250 employees.
Men make up 61% of the top quartile and 53% of the upper middle quartile for pay at PwC. Just 160 of the firm’s partners are women compared to 938 male partners. Women make up 54% of the lower middle and 53% of the lower wage quartiles.
So what’s the explanation for the discrepancy in compensation? PwC told the FT that its female workers were paid less because there were “more men in senior higher-paid roles and more women in junior and administrative roles.” Out of 938 partners at PWC, just 160 are women. By comparison. there are 1,651 female “support staff” compared with 411 male. If you’re wondering who occupies the most menial jobs in finance, therefore, the answer is clear: it’s the women.
Separately, the biggest banks in the world all passed The Federal Reserve’s stress tests, potentially dampening pressure to break them up and freeing up capital. However, bankers hoping for a piece of the pie in the form of a raise may be disappointed.
The Fed told large banks that they have enough capital reserves, and many – including J.P. Morgan Chase, Citigroup and Bank of America – rushed to announce plans for stock buybacks and to boost dividends for their shareholders. Wells Fargo and Morgan Stanley also announced stock buybacks. Soon after, they added more than $25bn in market value.
That shows how banks are desperately trying to generate investor interest – even though many of them are still struggling to meet profitability targets and the shares of some are trading below book value, according to Bloomberg.
Bankers are counting on President Donald Trump to ease rules forcing banks to reduce risk-taking and increase internal controls, which took a toll on revenue and caused costs to balloon. In addition, Jay Clayton, the new chairman of the Securities and Exchange Commission, said he’s going to introduce rulemaking initiatives to boost IPOs, which will benefit banks.
The annual review is a key piece of the Fed’s strategy to prevent a repeat of the financial crisis and taxpayer-funded bailouts. Firms demonstrated that they have enough capital to handle turmoil, such as surging unemployment, a sharp drop in housing prices or an extended stock slump, per Bloomberg. That led the Fed to say that they can proceed with payouts to shareholders.
This is all good news. Predictably, however, employees aren’t getting a look-in. As conditions improve, it’s all about rewarding shareholders. Staff are at the very back of the queue.
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Pine River Capital Management will spin off a nearly $2bn government bond-trading fund into a stand-alone firm. (WSJ)
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Some feel that the first modern financial crisis took place in 1997. (Bloomberg)
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