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The investment bank gender discrimination index

gender discrimination index banking

Investment banks talk a good talk when it comes to combating gender discrimination. They all have anti-discrimination programmes. They all have gender champions. But the UK government’s new requirement that organisations publish figures for the different amounts they pay men and women (the “gender pay gap”) have blown banks’ claims to good corporate citizenry out of the water.

While much has been made of the differences in the hourly pay rates for men and women at different banks, a more telling figure is that for the fall-off in the percentage of women in the lowest pay quartile versus the highest pay quartile.

Banks that have a high proportion of women in the lowest pay quartile, but which fail to sustain that proportion at higher pay quartiles have several problems: they’re either bringing junior women in at the bottom and failing to promote them into higher paid roles, they’re grouping women into lower paid jobs, or they’ve got a very successful program for hiring junior women but have historically failed to promote women into senior jobs and therefore have a lack of senior female role models.

The chart below ranks UK banking entities for gender discrimination based upon this measure. The higher the figure, the greater the percentage point difference between the number of women in the highest and lowest paid quartiles. At J.P. Morgan Limited, for example, just 9% of people in the highest paid quartile are women, compared to 64% in the lowest paid quartile – a drop-off of 55 percentage points. By comparison, at Morgan Stanley International, 46.9% of the lowest paid quartile is comprised of women, versus 26.1% of the top quartile – a drop off of “just” 20.8 percentage points.

The eagle-eyed among you will note the inherent confusion in the figures. Banks like J.P. Morgan, Credit Suisse and Morgan Stanley have multiple U.K. entities, with very different gender profiles. For example, while J.P Morgan Limited has a 55 percentage point difference in the percentage of women in the top and bottom pay quartiles and is therefore the worst performer, J.P. Morgan International Bank has just a three percentage point difference and is the best. J.P. Morgan Securities is somewhere in between.

In J.P. Morgan’s case, the difference appears to be down to the varying business activities of each entity. While J.P. Morgan Limited’s most recent accounts describe it as a “prominent arranger of M&A, syndicated debt and other corporate finance activities,” J.P. Morgan International comprises asset and wealth management staff. J.P. Morgan Securities comprises staff from across the corporate and investment bank, but its most recent accounts describe its primary activities as underwriting, sales and trading, and advisory services.

It’s hard not to conclude, therefore, that J.P. Morgan’s investment banking division (IBD) has a huge disparity between women at the bottom and women at the top, while its asset and wealth management division is far more equal and its sales and trading business is somewhere in between. A spokesperson for the bank said: “We previously announced that men and women at the firm, in aggregate, are paid comparably, taking into account a number of factors that potentially impact pay such as an employee’s role, tenure, seniority and geography. The most recent review concluded that, for both base salary and total compensation, after taking into account potentially relevant factors, globally, women are paid 99% of what men are paid.”

Credit Suisse and Morgan Stanley feature twice in the chart too. At Credit Suisse International, which mostly comprises the global markets and investment banking functions, the gender gap is 40.7. At Credit Suisse Securities, which comprises the corporate functions team, it’s just 28. At Credit Suisse UK – the private bank – it’s 35. At Morgan Stanley Employment Services, described by the bank as its “revenue divisions”, the gender gap between the highest and lowest pay quartiles is 38 percentage points. At Morgan Stanley UK (infrastructure), it’s 20.8.

One of the highest disparities in the percentage of women in the top and bottom pay quartiles is at RBC Europe, which only filed one set of figures for the UK. RBC does a good job of bringing women into its lowest paid or most junior jobs: 61% of people in its lowest paid quartile are women. But they’ve almost all disappeared by the time you get to RBC’s highest paid quartile, where just 8% of occupants are female. RBC didn’t respond to a request to comment, but a spokesperson told the Globe and Mail: “We recognize that this is an important conversation and the industry has a lot of work to do in closing the gender pay gap.”

As a measure of discrimination, the disparity between the percentage of women in highest and lowest paid quartiles isn’t infallible. SocGen International does well, for example, but this is only because it has very few women at every level (just 29% of women in the lowest paid quartile and just 8% at the top). For a fuller picture of the evolution of women across pay quartiles by bank, see the chart at the bottom of this page.


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