Gender pay gap continues to rise

The gender pay gap across Europe has increased to 10%, up from 7% two years ago, according to research by global management consultancy The Hay Group.

Its Non-executive directors in Europe 2013 report, which surveyed 393 of Europe’s largest quoted companies across 12 countries, found that the median actual pay earned by non-executive directors (NEDs) in Europe in 2013 was €86,000 (£72,440).

It found that Swiss companies continue to pay the most, at €273,000 (£229,956), while Austrian companies continue to pay the least, at €27,000 (£22,743).

The median fee earned for non-executive chairs across Europe was €249,000 (£209,740) in 2013. The highest and lowest-paying sectors were identified as pharmaceuticals and transportation, respectively.

The research also found that, while NEDs sitting on audit committees still receive higher fees than those sitting on remuneration committees, the gap continues to close, at both chairmen and membership levels.

Carl Sjöström, regional director, reward services, Europe at Hay Group, said: “Organisations generally pay the same amount to all NEDs, so the explanation for the pay gap is that more men than women secure positions on board committees, which carry extra fees.

“If we look at the data from a country perspective, we see large variations. In Germany and Italy, for example, men are paid 22% more than women.

“The differences between countries are stark. On the one hand, we have Swiss non-executive chairs earning the most, with €830,000 (£699,132) the median while, just across the Alps, their Austrian counterparts earn the least, at €53,000 (£44,643).

“Differences in company size, sector, board responsibilities and other factors can only partly explain this huge difference.

“There is a strong correlation between size of company and pay in some countries and industries, but not in all. Reward culture is certainly a major factor. The other strong correlation we find is that industries with a significant focus on risk tend to pay higher NED fees.”