As dismal as it sounds, a recent study found that women hit the pay ceiling almost a whole decade earlier than men.
PayScale, a U.S.-based firm which collects salary data, found that female college graduates generally see salary growth stop at 39, with earnings of $60,000 per year. By contrast, college-educated men keep getting raises until they are 48, where annual income plateaus at $95,000.
Where are the women at the top?
Although the above data isn’t specific to the banking sector, having less boardroom presence does affect female compensation. A Heidrick & Struggles report in 2010, which looked at the sales and trading divisions of six leading investment banks, found that women in Asia hold just 11 percent of MD positions and 18 percent of director roles. Last month, we published our own Salary and Bonus Survey showing women working in financial services in the UK earned on average 21 percent less than men in 2011.
A female front-office banker, who asked not to be named, says income for women may be staying static because of the changing nature of their work as they age. “Wages could go down partially because women make certain choices such as transferring to a different division where the pace is slower or where performance isn’t as directly linked to pay,” she says.
While most big firms try to retain senior women with consistent salary increases after they’ve had children, our source says it’s common for mothers to leave banking. She, too, hopes to move to a more flexible work arrangement after having kids, but acknowledges this may not be possible due to the intensity of her job.
What pay discrimination?
Nevertheless, a former bank HR practitioner, who spoke on condition of anonymity, says: “I’ve never seen pay discrimination – where if you are male you are paid more; gender has never been an issue.” Other factors, however, do come into play when it comes to compensation. For instance, she says, two candidates with the same years of experience could have different track records – perhaps one brings in more revenue – which can explain why a better package is offered.
Neither does she agree that female bankers hit their peak pay at the fairly tender age of 39. “I know a lot of women in their 40s who are very well paid. In fact, I’ve found that some are able to run at a fuller speed now because their kids are older and they can focus more on their job.”
Editor’s note: This article first appeared on our Singapore site but is applicable here as well.