FCA pay and bonus gap data 2022

Our latest figures compared to the last two years are shown in the table below.

Table 1: Pay and bonus gap figures for the years 2022, 2021 & 2020

*Our numbers declaring a disability are small at less than 10% and this can cause fluctuations in yearly comparisons.

Key changes for 2022 (reflecting the reporting period April 2021 - March 2022) compared to the prior year:

• Improvements in all our pay gaps with the exception of our mean disability pay gap.
• Significant improvements in our mean bonus gaps including a 12.2% reduction in our ethnicity bonus gap.
• Our median bonus gaps have increased, in contrast to the mean improving, and reflects a change in the pattern of bonus awards. For the performance year ending 31 March 2021, with awards made in April 2021, we changed our approach to the awarding of bonuses. The overall funding was reduced, and awards were based on a fixed value calculated as a percentage of the average salary for each grade. This is in contrast to being a percentage of individual salary as in previous years. This approach combined with an imbalance in representation, led to a greater disparity between the median bonus awards of each group.

Our pay and bonus gaps have generally moved in the right direction over the last three years. Our ethnicity pay and bonus gaps in particular have seen some significant decreases both at the median and the mean. We continue to analyse our people data to identify the underlying drivers of our pay and bonus gaps. This enables us to understand where we need to target our interventions.  

Drivers of our pay and bonus gaps

Our pay and bonus gaps continue to be driven mainly by imbalances in the distribution of colleagues in different roles and grade levels within the organisation. We acknowledge there is still more work to do for us to see impactful sustainable change. Because our bonuses are awarded as a percentage of annual salary, our bonus gap is also impacted by the distribution of part time workers. In contrast to this the pay gaps are not impacted by the distribution of part time workers as the calculation uses a full time equivalent hourly pay rate.

We have started to refresh our internal Diversity & Inclusion (D&I) strategy[1], redefining our priorities and measures of success to reflect the current D&I landscape and our evolving needs. This new strategy will be data and evidence-led to ensure that we are prioritising the areas where we need to have the greatest impact. It will lead to programmes and interventions that nurture a working environment where everyone can bring their authentic selves to work so they can fulfil their potential and contribute meaningfully to the FCA’s outcomes. We have also revised our gender and ethnicity targets: expanding targets to pipeline grades and making them more ambitious to boost female and minority ethnic representation across all levels of our organisation. The changes we have made, and continue to make, should help to further narrow our pay gaps in future years.

We announced our new employment offer[2] to colleagues in March 2022. This followed an extensive consultation period that began in September 2021. Our new grading, pay and benefits offer aims to ensure we can retain and attract the skills we need to meet our vital objectives – protecting consumers and markets and promoting competition – for the long term. It is designed to reward strong, consistent performance and aid career development. Importantly, the changes also advance our diversity and inclusion objectives.

The changes focus the greatest pay increases on those in the less senior roles. The result is a positive impact on the pay of younger, female and minority ethnic colleagues. Simplifying and making more transparent our approach to pay and job families, as well as assisting career development and mobility, will deliver diversity and inclusion benefits as part of our broader strategy.

The combined impact of this in closing our pay gaps will be reflected in future reporting periods. The discretionary performance bonus scheme that has now been withdrawn will be included for the last time in our bonus gap published in 2023 (covering the reporting period from 1 April 2022).

We remain committed to recruiting, developing, and retaining diverse talent across the organisation, and supporting the wider financial services sector.

For more information about the work we're doing to improve diversity and inclusion at the FCA and drive progress on closing our pay gaps, please see our Annual Diversity Report 2021/2022[3].

We continue to provide an increased level of transparency, publishing our ethnicity pay gaps and disability pay gaps, despite there being no legal requirement to report these, as we believe that data transparency drives positive action. For the third year, we have also published more detailed data, sharing our ethnicity pay gap broken down into the UK census ethnicity categories, our pay gaps by contractual grade, as well as the intersectional gender and ethnicity pay gap. We know that the experience of ethnic groups is not the same, and more granular data helps us better understand our challenges and take more targeted positive action.

Our gender pay gap reporting is currently based on legal sex (HMRC set a requirement to report for payroll purposes using legal sex). The Government Equalities Office (GEO) advises organisations to report on pay gap data using information employees have provided for payroll purposes. This is a binary field (male or female). Employees can also choose to disclose to us their gender identity. We offer five response options for employees who wish to self-identify (Female, I use another term, Male, Non-Binary, prefer not to say). We are committed to respecting how an employee identifies in terms of their gender. We follow current GEO guidance[4] on pay gap reporting in cases where an individual identifies as non-binary (not identifying as either male or female). This allows for employers to omit non-binary individuals from gender pay gap calculations.

The calculated pay gaps are based on data recorded on March 31, 2022. The same method of calculation as used to calculate the gender pay gap is used to calculate the ethnicity and disability pay gaps. 

We continue to see slight changes in our pay gap figures. For this reporting period, the FCA did not increase salaries as part of the annual pay award in April 2021. An exception was made for those paid below £24,000 per annum on a full-time equivalent basis. The changes in the pay gap therefore largely reflect the impact of new appointments and movements within our workforce.

We have seen more significant movements in our bonus gap figures. For this reporting period, the FCA changed how discretionary performance bonuses were awarded in April 2021. Considering the impact of Covid-19 and wider economic conditions we made short term changes in our approach. The overall funding was reduced, and the awards were based on a fixed value calculated as a percentage of the average salary for each grade. Awards started at 11% for the most junior roles and stepped down to 8% for the most senior roles. The positive impact of this is seen in how the mean bonus gaps have reduced. The most significant fall is in our ethnicity mean bonus gap, reducing by 12.2%. 

The median bonus gaps have increased. This movement, compared with the mean reducing, reflects how the value of the bonus awards were stepped rather than being more evenly graduated across the distribution as in previous years. This approach combined with an imbalance in representation, led to a greater disparity between the median bonus awards of each group. In contrast to the overall bonus gap when reviewing the outcomes at grade level we saw very small differences in the medians between males and females resulting in bonus gaps that were not statistically significant.

The median gender pay gap is 19.8% down a further 0.3% from 20.1% in 2021. The mean gender pay gap has decreased to 15.6%, a 0.7% decrease since 2021. 

The ethnicity pay gap has seen a larger decrease. The median pay gap is 22.5%, down by 2.0% from 24.5% and the mean pay gap is 22.8%, down by 1.6% from 24.4% in 2021. 

The median disability pay gap is 9.3%. It has decreased by 0.1%. The mean disability pay gap is 6.2%, an increase of 2.4% when compared to last year. 

It is important to consider disclosure rates when reviewing movements in pay and bonus gap reporting, with those declaring any given characteristic being a proportion within this. Smaller populations are susceptible to bigger percentage changes where the underlying data may see minimal shifts. Our disclosure rates are outlined in the table below and reflect the relevant employee population as of 31st March 2022.

Table 2: Our disclosure rates for Gender, Ethnicity and Disability          

Table 3: Our Pay Gaps by Gender, Ethnicity and Disability

Our gender median bonus gap is 33.3% and the mean is 16.4%. The bonus gap is based on the gross bonus paid in the period from 1 April 2021 to 31 March 2022. The median has increased by 9.8%, and the mean has decreased by 3.8% since last year. 

The increase to the median bonus gap is reflective of the higher representation of females in more junior (lower paid) roles compared to males who were more likely to sit in more senior (higher paid) roles.

For this reporting period the median female sat in the Associate grade vs the median male who sat in the Senior Associate grade, the fixed approach to bonuses meant that both were eligible for the same level of bonus as a percentage, however as bonus awards were based on the average salary by grade the cash value awarded to Senior Associates was higher than that of Associates.

The ethnicity median bonus gap is 33.3%, this is the same as the gender bonus gap and the mean is 2.7% lower at 13.7%. In the last year there has been a 4.5% increase in the median and a 12.2% decrease in the mean. 

As with the gender bonus pay gap the largest driver of the ethnicity bonus gap at the median was reflective of the higher representation of minority ethnic colleagues in more junior roles vs white colleagues in more senior roles. The median minority ethnic employee sat in the Associate grade vs the median white colleague who sat in the Senior Associate grade. Once again, the fixed approach to bonuses meant that both were eligible for the same level of bonus as a percentage, however this translated to a higher cash value for Senior Associates based on the average salary for this grade.

The disability median bonus gap has increased from 15.1% to 17.9%. The mean has decreased from 15.3% to 5.3%. The proportion of colleagues declaring a disability is less than 10% so the figures can vary considerably year on year. 

Table 4: Our Bonus Gaps by Gender, Ethnicity and Disability