Goldman Sachs Pay Data Reveals Lurking Gender Gap -- 5th Update

By Liz Hoffman and Margot Patrick 

Women working at the main U.K. arm of Goldman Sachs Group Inc. make 36% less than men, reflecting a dearth of women in the bank's senior ranks and laying bare a continuing challenge for Wall Street as a whole.

A filing by the firm Friday, which followed ones in recent weeks by Barclays PLC, UBS Group AG and others, shows the financial industry is out of step with the broader economy as women graduate college at higher rates than men and make gains elsewhere.

The numbers come at a time of intense focus on how women are treated at work. Companies including banks have been rocked in recent months by allegations of sexual harassment and discrimination.

They also put gender parity squarely on the agenda inside Goldman, which has held itself out as a leader in Wall Street workplace practices. President David Solomon, who emerged this week as the likely successor to Chief Executive Lloyd Blankfein, has worked in recent years to promote and recruit more women while acknowledging that the firm must do better.

The data -- only a snapshot of pay for about 5,000 people, 13% of Goldman's global workforce -- was released Friday as part of a gender-pay disclosure mandated by the U.K. Similar disclosures aren't required in the U.S.

The issue appears to be less that Goldman and other companies deliberately underpay women, rather that women are underrepresented in the senior, revenue-driving roles that typically carry big bonuses. That point is borne out by the makeup of Goldman's partnership, a status symbol unmatched on Wall Street and bestowed every two years to a select few.

Women make up just 15% of Goldman's 450 or so partners, and they are more than twice as represented in back-office jobs such as compliance, legal and human resources than they are in profit-making businesses like trading, according to a Wall Street Journal review of the pool.

Of the four women with a seat on Goldman's powerful management committee, only one runs a business that makes money for the firm. There are 27 men on the panel.

That is progress from 1996, when just seven of Goldman's 173 partners were women. But it is still out of step with current workplace trends.

"We have made some progress, but we have significant work to do" in helping women "rise to the highest levels of our firm," Messrs. Blankfein and Solomon said in a memo to staff.

That starts with bolstering the firm's recruiting pipeline. Goldman aims to have women make up 50% of its incoming analyst classes by 2021. Already, Goldman has changed the way it recruits junior bankers, looking beyond the Ivy League to attract a more diverse pool of candidates.

Two years ago, the firm began closely tracking its summer interns, who account for about 75% of its incoming analyst class, with the goal of retaining nontraditional candidates who might fall behind.

But it typically takes a decade or more to become a managing director at Goldman, meaning initiatives will take years to pay off.

"Even though we've moved the ball forward, it's not easy to move it forward as quickly as we would like," Mr. Solomon said on a podcast in October.

Other U.S. banks with U.K. operations, such as JPMorgan Chase & Co. and Bank of America Corp., are expected to disclose their own pay numbers in coming weeks. The deadline for doing so is April 4.

Last month, Barclays reported a median gap of 44% between men's and women's pay and a 73% gap on bonuses. At the London arm of Switzerland's UBS, women are paid 25% less, in part because they hold only 21% of the best-paid jobs.

The U.K. disclosures so far show that women typically fill about half of firms' junior and midlevel roles, but rarely more than a third of higher-paying positions.

Among Goldman's highest quartile of earners, 83% are men. Nearly two-thirds of the lowest quartile of earners are women.

Write to Liz Hoffman at [e-mail] and Margot Patrick at [e-mail]

(END) Dow Jones Newswires

March 16, 2018 18:55 ET (22:55 GMT)

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