The gender pay gap across UK financial services boardrooms decreased five percentage points between 2019 and 2023, from 30 per cent to 25 per cent, according to the latest EY European Financial Services Boardroom Monitor, which incorporates new analysis on the most recently reported non-executive (non-exec) director remuneration.
The difference in the overall remuneration of men and women across the UK’s financial boardrooms during the four-year period decreased due to a marginal fall in remuneration for male board directors at UK firms, and a concurrent uptick in remuneration for their female peers.
Overall pay across UK financial boardrooms fell between 2019 and 2023 on an average basis but remained higher than the European average every year through the period.
North American non-exec directors were found to have received significantly higher overall remuneration than their counterparts in the UK, primarily as a result of receiving equity and stock options in addition to their fixed-fee compensation, which UK and EU boards do not offer for independence and objectivity reasons.
Martina Keane, EY UK & Ireland Financial Services Leader, says: “UK financial services firms have made clear progress towards more equitable pay for male and female board directors, but the pay gap between genders remains stark. While more men than women sit on committees and occupy chair roles, the fact that women on UK boards earn a quarter less than their male peers on average is a concerning reality. Global competition for talent at board-level is only growing, and UK financial services firms must do more to further improve gender equity in their boardrooms and balance remuneration levels.”
Global gender pay comparisons
Between 2019 and 2023, average remuneration for female non-exec board directors across UK financial services firms increased 7 per cent, from USUSD209,987 in 2019 to USD225,275 in 2023. During this time, remuneration for male non-exec directors decreased 1 per cent, falling from USD301,966 to USD299,076.
By comparison, over the same period, the gender pay gap across European financial services boardrooms increased by five percentage points, from 31 per cent to 36 per cent.
Between 2019 and 2023, average remuneration for female non-exec board directors across European financial services firms increased by 12 per cent, from USUSD164,584 in 2019 to USD184,477 in 2023. During this time, remuneration for male non-exec board directors increased at a higher rate of 21 per cent, rising from USD238,706 in 2019 to USD287,994 in 2023.
Over the same period, the gender pay gap across the boardrooms of the largest North American financial services firms narrowed two percentage points, from 7 per cent to 5 per cent.
Remuneration awarded to female non-exec board directors across North American financial services firms increased by 13 per cent, from USD287,465 in 2019 to USD324,250 in 2023. Pay awarded to male non-exec board directors increased at a slower rate of 10 per cent, from USD309,392 in 2019 to USD340,481 in 2023.
In 2023, female directors tracked across UK financial boardrooms earned USD75 for every USD100 earned by male peers, compared with USD70 for every USD100 earned by male directors in 2019, representing a five percentage point decrease in the gender pay gap.
In contrast, in 2023, female directors tracked across European financial boardrooms earned USD64 for every USD100 earned by male peers, compared with USD69 for every USD100 earned by male directors in 2019, representing a five percentage point increase in the gender pay gap.
Comparing this to female non-exec board directors at North American financial services firms, women earned an average USD95 for every USD100 earned by their male peers, compared with USD93 for every USD100 earned by male directors in 2019. This represents a two percentage point decrease in the gender pay gap.
Gender splits within UK, European and North American boardrooms
The gender split (as at the end of 2024) across directors of UK financial services firms stands at 45 per cent female and 55 per cent male, compared to 43 per cent female and 57 per cent male across European financial services firms more broadly.
Data for North American firms shows that at the end of 2023, board-level female representation was nine percentage points lower than the UK, at 36 per cent female and 64 per cent male.
Twenty-one percent of UK financial services firms have less than 40 per cent female representation at board level – the same vs the end of 2023. In comparison, 28 per cent of European financial services firms have less than 40 per cent female representation.
UK non-exec directors are paid more than European counterparts, despite fall in overall pay levels
Total levels of remuneration fell across UK financial boardrooms fell between 2019 to 2023 but remained higher than European boardrooms in every year through the period.
In 2019, UK non-exec board directors were paid 27 per cent more than their counterparts in Europe more broadly. Boardroom remuneration across the sector in the UK averaged USD269,802 per director (on mean), versus USD212,360 across Europe’s financial boardrooms.
However, the pay gap between UK non-exec directors and their peers in Europe narrowed over the period. In 2023, UK non-exec board directors were paid 10 per cent more than their peers across Europe more broadly, earning USD266,368 versus USD242,715 respectively.
This is due to mean remuneration for UK non-exec directors falling by 1 per cent between 2019 and 2023, from USD269,802 in 2019 to USD266,368 in 2023, while over the same period, mean remuneration for non-exec directors across Europe rose by 14 per cent, from USD212,360 to USD242,715.
North American non-exec directors are paid more than UK counterparts
UK board directors were paid less than their North American counterparts in every year from 2019 to 2023, with the pay gap between the UK and North America widening over the period.
In 2019, North American non-exec board directors were paid 12 per cent more than their counterparts in the UK. Boardroom remuneration across the sector in North America averaged USD302,814 per director, versus USD269,802 across UK’s financial boardrooms.
In 2023, non-exec board directors across North American financial services firms were paid 26 per cent more than peers in the UK, earning USD334,707 per director versus USD266,368, respectively.
Female non-exec board directors at North American financial firms, who are paid less than their male peers in the region, still earn 8 per cent more than male non-exec board directors at UK financial services firms, according to the latest available data. In 2023, remuneration for female non-exec board directors at North American firms averaged USD324,250, versus USD299,076 for male non-exec directors at UK firms.
Non-cash remuneration, including equity and options awards, was found to be a major component of overall remuneration awarded to non-exec board directors across North American financial firms. It is a practice that is virtually non-existent across UK boards, as the country’s corporate governance codes discourages non-exec directors from receiving any variable pay in order to maintain independence and objectivity.
In 2019, 54 per cent of remuneration awarded to non-exec board directors across North American financial firms was structured in non-cash terms through equity or stock option awards, rising to 56 per cent by 2023. While UK non-exec board directors receive less remuneration overall, average fixed-fee compensation is much higher than that awarded to their North American counterparts. In 2023, the average fixed-fee compensation for North American non-exec board directors, excluding non-cash elements such as equity or stock option awards, was USD156,811, compared with USD266,368 for UK non-exec board directors.
European market comparisons in non-exec boardroom remuneration
Across European markets, non-exec directors at UK financial services firms were the third most well-remunerated in 2023, behind directors at Swiss and Spanish firms. On a median basis, UK directors were paid USD199,856 in 2023, with Swiss and Spanish directors receiving USD338,621 and USD252,570 respectively, on median.
Absolute levels of female remuneration across European markets follow a similar pattern. Female board directors at Swiss, Spanish and UK financial services firms received the highest overall pay in 2023, at USD254,732, USD246,491, and USD191,000, respectively. Female board directors at Norwegian, French and Swedish firms received the lowest overall pay on median in 2023, at USD60,141, USD86,184 and USD108,883, respectively.
At 11 per cent, the UK has a smaller gender pay gap on median than Switzerland (49 per cent), Denmark (27 per cent), Germany (20 per cent) and Italy (14 per cent), and a wider gender pay gap than Spain (7 per cent). Financial services firms based in Norway have the narrowest board-level gender pay gap, with female board members at Norwegian firms paid 25 per cent more than their male counterparts (USD60,141 for women on median compared to USD48,233 for men).
European sector comparisons
Within the UK financial services industry, non-exec directors in the banking sector were paid the most in 2023, at USD296,785 on median, followed by directors at UK insurers (USD191,000) and UK asset managers (USD135,000).
Within the European banking sector, UK non-exec directors received the second highest remuneration compared with other markets in 2023. On median, non-exec directors at UK banks were paid USD296,785 in 2023, behind only directors at Swiss banks, who were paid USD653,160 on median.
Within the European insurance sector, UK non-exec directors received the third highest remuneration compared with other markets in 2023. On median, non-exec directors at UK insurers were paid USD191,000 in 2023. This was behind non-exec directors at Swiss and Italian insurers, who were paid USD338,395 and USD205,780 respectively, on median.
Within the European wealth and asset management sector, UK non-exec directors received the third highest remuneration compared with other markets in 2023. On median, non-exec directors at UK asset managers were paid USD135,000. This was behind non-exec directors at Swiss and Dutch asset managers, who were paid USD235,138 and USD168,564 respectively, on median.
UK non-exec directors with c-suite or ESG skillsets earn the highest
Levels of remuneration across the UK’s financial boardrooms also vary according to directors’ skillsets and professional backgrounds.
Between 2019 and 2023, non-exec directors across the UK’s financial boardrooms with prior experience in a c-suite role were awarded higher remuneration every year. Most recently, in 2023, non-exec board directors with c-suite experience were paid an average of USD304,562, compared to USD258,190 to those without c-suite experience.
A similar trend is evident among board directors with sustainability expertise; in 2023, UK non-exec board directors with sustainability expertise were paid an average of USD365,884, compared to USD269,523 to those without sustainability expertise.
Omar Ali, EY Global Financial Services Leader, concludes: “The landscape for boardroom remuneration across financial firms in Europe is shifting, and compensation is a key consideration for chairs as they build and maintain their boards in an increasingly global industry. This is particularly the case as chairs of UK firms contend with the more lucrative packages offered in North America, which often include equity and options awards.
“Offering competitive – and importantly, equitable – pay is essential to ensure that boards are equipped with the skills and diversity necessary to navigate evolving market risks and challenges. A structured review of regional pay disparities – and the steps that can be taken to address them – is now integral to maintaining the strength of the UK financial services sector.”
