Revealed - gender pay gap across UK boards is narrowing

The analysis highlights both progress and persistent gaps in boardroom pay equity

Revealed - gender pay gap across UK boards is narrowing

Diversity & Inclusion

By Josh Recamara

The gender pay gap across boardrooms in UK financial services firms reduced to 25% from 30% between 2019 and 2023, according to the EY European Financial Services Boardroom Monitor.

The narrowing of the pay gap in UK boardrooms was attributed to a slight decline in remuneration for male directors and an increase for female directors. Despite an overall drop in average pay across UK boardrooms, remuneration levels remained above the European average throughout the four-year period, according to the report.

Meanwhile, the analysis showed that non-exec directors in North America consistently received higher compensation than their UK and European counterparts. This difference was primarily due to equity and stock options awarded in North America, a practice not commonly followed in the UK and Europe to maintain board independence.

From 2019 to 2023, remuneration for female non-exec directors in the UK rose by 7%, while male directors saw a 1% decrease. By contrast, the gender pay gap widened in European financial boardrooms, increasing from 31% to 36%, as male directors’ pay grew at a faster rate than that of female directors. In North America, the gender pay gap narrowed from 7% to 5%, with women’s pay increasing by 13%, compared to a 10% rise for men.

In 2023, women in UK financial boardrooms earned $75 for every $100 earned by their male peers, an improvement from $70 in 2019. In Europe, women earned $64 per $100, while in North America, the figure was $95 per $100.

Martina Keane, EY UK & Ireland financial services leader, noted the progress in addressing gender pay disparities in UK boardrooms but stressed that significant gaps remain.

“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,” she said, emphasising the need for further efforts to balance remuneration and improve gender equity.

As of 2024, women accounted for 45% of directors in UK financial services firms, compared to 43% in Europe. In North America, women held 36% of boardroom positions at the end of 2023. Among UK firms, 21% had less than 40% female representation at board level, a figure unchanged since 2023.

Non-exec directors in the UK earned more than their European counterparts, despite a 1% drop in UK pay levels between 2019 and 2023. Over the same period, European boardroom pay rose by 14%. However, UK directors continued to earn less than their North American peers, with the pay gap between the regions widening from 12% in 2019 to 26% in 2023, the report showed.

Female non-exec directors in North America earned 8% more than male directors in the UK in 2023, with non-cash remuneration, like equity and options, contributing significantly to the disparity.

Omar Ali, EY global financial services leader, underscored the importance of competitive and equitable pay to attract talent in a globalised industry.

“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,” he concluded.

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