A material gender pay gap persists across EU banks and investment firms, the EBA observes in its Benchmarking Report

The European Banking Authority (EBA) today published its Report on Remuneration and Gender Pay Gap Benchmarking for institutions and investment firms. The Report shows a material gender pay gap in 2023 with women earning less than men. Remuneration practices in institutions remained stable between 2021 - 2023, but the ratio between the variable and fixed remuneration in investment firms increased significantly after the introduction of the Investment Firms Directive (IFD). Alongside its annual Report on Remuneration of identified staff, the EBA is releasing, for the first time, a detailed section on gender pay gap covering all staff as well as those identified as having a material impact on the risk profile of institutions and investment firms. In 2023, the average ratio between variable and fixed remuneration for identified staff in investment firms stood at 145.85% (2022: 191.42%), higher and less stable compared to the ratio in institutions of 59.59% (2022: 58.62%). Higher bonuses in investment firms are driven by different business models and a more volatile profitability. In 2023, the highest bonuses in institutions were paid in the area of investment banking, whereas in investment firms in the area of dealing on own account, underwriting and placing of instruments, where the average ratio reached 521%. This is a material increase compared to 2021, where for investment firms a 100% limit (200% with shareholders’ approval) for bonuses compared to the fixed remuneration...