Gender Pay Gap Report - 2019 - Johnson Matthey

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Johnson MattheyGender Pay GapReport 20191 Johnson Matthey Gender Pay Gap Report 2019

Johnson Matthey’s combined UK gender pay gap has reducedfrom 8.5% to 6.0% and continues to be well placed againstthe national average gender pay gap of 17.3%, but there is stilla talent gap caused by a gender imbalance across the organisation.2 Johnson Matthey Gender Pay Gap Report 2019

IntroductionWomen currently represent26%As Johnson Matthey continues to focus on embedding a truly diverse and inclusiveculture, we have seen some positive shifts in our Gender Pay Gap since last year.We know that a diverse workforce will enhance our innovation, decision making,product development and help us attract and retain the best talent.of our UK employees40%of our board33%of our Group Management Committee28%of our senior management29%of our other management roles3 Johnson Matthey Gender Pay Gap Report 2019As a global company, we want to attract,motivate and retain the most talentedpeople. Being a diverse and inclusive placeto work and welcoming all forms ofdifference, embracing diversity andpromoting equality and inclusion will allowus to achieve this on a global scale.Overall, women currently represent 26%of our UK employees (up by 1%). Womenalso make up 40% (up by 7%) of ourboard, 33% of our Group ManagementCommittee, 28% (up by 5%) of our seniormanagement group and 29% of othermanagement roles.In 2019, we continued the trend ofhiring a greater percentage of womenyear on year. We have also implementednew policies and have put a range ofprogrammes in place to improve ourgender balance. The focus on diversitycontinues here at Johnson Matthey.We have clear objectives for 2020 andIn this report, we set out our UK genderbeyond to deliver more opportunities forpay gap information. We also provide somewomen and support our commitmentinsight into this gap and run through current to diversity, and for women to considerinitiatives and future plans to improveJohnson Matthey as an employer ofour gender balance and ensure fair pay.choice.Robert MacLeodChief ExecutiveBeing a truly inclusive company is drivenby our values. As a company we believethat being diverse and inclusive allows usto take better care of each other, workbetter together and promote innovation.Being inclusive is also a key part of beinga company that acts with integrity.Annette KelleherChief HumanResources Officer

Gender pay gapkey factsThe gender pay gap is the averagedifference in pay between menand women.Women currently represent26% of our UK employees.The number of womenemployed in managementpositions increased in 2019,from 28% to 29%Johnson Matthey is committedto being a meritocracy wheremen and women are paid fairly.Female representation is lowerin our science, technology andengineering roles.A number of initiatives areongoing or are planned forthe future.4 Johnson Matthey Gender Pay Gap Report 2019

HelpfuldefinitionsUnderstandingthe gender pay gapReporting ourUK gender pay gapThe gender pay gap isnot the same as equal payThe gender pay gap can be thoughtof as a talent gap as it identifies anunequal distribution of men andwomen across the company wheremore males are employed in higherpaid roles.Regulations in the UK require all legal entitiesin Great Britain that employ 250 or moreemployees to publish a number of statisticsrelating to the difference in remunerationbetween their male and female employees.Johnson Matthey employs nearly 4,300 peoplein the UK through a number of legal entities.The majority of our people are employed byeither Johnson Matthey Plc (89%) or MacFarlanSmith Limited (8%). However, we have alsodecided to voluntarily disclose our combined UKresults, which includes employees in our legalentities with fewer than 250 employees.Equal pay means that men and womenwith equivalent experience and performancedoing equivalent work should receive equalpay. Johnson Matthey is committed toproviding equal pay for equivalent workbecause it’s the right thing to do.4,300People in the UK employedby Johnson Matthey5 Johnson Matthey Gender Pay Gap Report 2019Our pay policies and practices are designedto control potential biases and to help ensurea meritocracy where men and women withthe same experience and performancedoing equivalent work are paid equally. Wealso have a standard global approach to jobgrading, which underpins how we rewardour employees.A gender pay gap does not mean that thereare equal pay issues, rather it identifies anunequal distribution of men and womenacross the company where more males areemployed in higher paid roles. It can reallybe thought of as a gender talent gap.

Mean versusmedian pay gapMenWomenThe mean pay gapThe median pay gapThe mean gender pay gap is the difference in the averagehourly Ordinary Pay rate for women compared to men.The median represents the mid-point. If you separately lined up all the womenand men, the median pay gap is the difference between the hourly OrdinaryPay rate of the middle woman compared to that of the middle man.Lowesthourly pay Numberof maleemployees Numberof femaleemployees Highesthourly payMean maleaverage payThedifference Medianhourly payMeanhourlypay gapThedifferenceMedianhourlypay gapMean femaleaverage payOrdinary Pay is not limited to basic pay, but also includes other types of pay such as allowances, pay for leave and shift premium pay. It does not include pay for overtime or pay relating to redundancy /termination of employment. The figures used are gross before income tax and national insurance deductions but after any deductions for salary sacrifice benefits e.g. pension, childcare vouchers etc.6 Johnson Matthey Gender Pay Gap Report 2019

Understandingour pay gapJohnson Matthey UK 17.3%Consolidated numbers including all UK employeesONS Great Britain median pay gap2018100%of Johnson Mattheywomen73.8%201926.2%menMenMedian pay gapMean pay gapMedian bonus pay gapMean bonus pay gap 8.5% 6.9% 7.4% 3.8%Median pay gapMean pay gapMedian bonus pay gapMean bonus pay gap 6.0% 5.4%-2.28%-7.2%% receive abonus paymentPopulation by pay quartiles2018 Lower quartile2019 Lower quartile62.1%37.9%2018 Lower middle quartile62.2%37.8%96.5%2019 Lower middle quartile80.4%19.6%2018 Upper middle quartile80.2%19.8%2019 Upper middle quartile80.6%19.4%2018 Upper quartile76.8%23.2%76.1%23.9%2019 Upper quartile77.6%7 Johnson Matthey Gender Pay Gap Report 2019Women22.4%% receive abonus payment96.7%

Understandingour pay gapJohnson Matthey Plc 17.3%Our largest employing entity in the UKONS Great Britain median pay gap201889%of Johnson Mattheywomen74.6%201925.4%menMenMedian pay gapMean pay gapMedian bonus pay gapMean bonus pay gap 7.2% 5.0% 7.6%-3.2%Median pay gapMean pay gapMedian bonus pay gapMean bonus pay gap 4.3% 3.8%-1.42%-8.6%% receive abonus paymentPopulation by pay quartiles2018 Lower quartile2019 Lower quartile61.7%38.3%2018 Lower middle quartile62.8%37.2%96.7%2019 Lower middle quartile80.7%19.3%2018 Upper middle quartile80.7%19.3%2019 Upper middle quartile80.7%19.3%2018 Upper quartile75.9%24.1%2019 Upper quartile75.3%8 Johnson Matthey Gender Pay Gap Report 2019Women24.7%73.8%26.2%% receive abonus payment96.7%

Understandingour pay gapMacFarlan Smith Limited 17.3%Employs individuals in Edinburgh, ScotlandONS Great Britain median pay gap20188%of Johnson Mattheywomen201921.0% 79.0%menMenMedian pay gapMean pay gapMedian bonus pay gapMean bonus pay gap 17.5% 14.1%Nil% 4.6%Median pay gapMean pay gapMedian bonus pay gapMean bonus pay gap 14.3% 12.4%-17.9%-1.2%% receive abonus paymentPopulation by pay quartiles2018 Lower quartile2019 Lower quartile60.7%39.3%2018 Lower middle quartile54.7%45.3%95.6%2019 Lower middle quartile80.9%19.1%78.4%21.6%2019 Upper middle quartile2018 Upper middle quartile86.9%18.4%81.6%13.1%2018 Upper quartile2019 Upper quartile86.9%9 Johnson Matthey Gender Pay Gap Report 2019Women13.1%90.2%9.8%% receive abonus payment96.7%

Understandingour pay gapOur pay ranges differ by functionas well as by job level to reflectthe variations in market rates ofpay. Therefore, the gender splitbetween functions impactsour gender pay gap.The median pay gap for our people in the UKhas significantly reduced from 8.5% in 2018 to6.0% for 2019. This is due to Johnson Matthey’songoing commitment to reducing the genderpay gap as well as the strong female talentacross Johnson Matthey that is emerging duringour talent review process. The recognition ofour strong female talent is particularly evidentwhen looking at the annual bonus data. Thepercentage of women in senior managementpositions has also significantly increasedsince 2018 (from 23% to 28%). Having morewomen in senior positions speaks strongly toour commitment to be a diverse and inclusiveorganisation and has also had a positive impacton the gender pay gap.10 Johnson Matthey Gender Pay Gap Report 2019However, across our general population therehas been little change in the gender split since2018 and, as we noted then, our gender paygap continues to be driven by female underrepresentation and by the gender split in ourdifferent functions. This is because our payranges differ by function as well as by job level toreflect the variations in market rates of pay fordifferent functions. For example, our pay rangesfor chemical engineers are higher than for roles inHuman Resources (HR) at the same grade, and aswe have more male chemical engineers and morewomen in HR, this uneven gender distributioncontributes to our gender pay gap. A large number of our manufacturing rolesare held by men, which is consistent withthe demographics in the wider economy. Inparticular, shift patterns requiring employeesto work less sociable hours attract a shiftallowance, and women are less likely thanmen to work these shift patterns.Our gender pay gap also reflects broader issuesthat are also evident in the wider economy,including: Fewer women occupy our science, technologyand engineering roles. With only 24% ofUK graduates studying science, technology,engineering and mathematics (STEM) beingwomen2 it is challenging to recruit more womeninto our technical roles.Jane ToogoodSector Chief Executive,Efficient Natural Resources“Diversity bringswith it differentperspectives,which help us driveinnovation anddeliver betterbusiness results.”2. WISE Resources 2019.

What we are doingto eliminate the gapWe are making good progress withthe gender pay gap as we continueto focus on a number of key areasto achieve a truly inclusive culture.This year, we have focused on gender to accelerateour Diversity and Inclusion agenda. We haveimplemented internal guidance on gender balancetargets to significantly increase female occupancyof roles by end 2025. This focus has enabled anincrease to 23 from 75 in our Equileap ranking.We have been very successful in attracting andrecruiting females onto our global graduateprogrammes, with two thirds of our UK graduatehires being female this year in STEM, operationsand commercial roles. This kind of success in thegraduate programme is key to re-balancing theleadership pipeline for these functions.Training and developmentWe offer a range of diversity and inclusionprogrammes to raise awareness and help educateour people in the areas of diversity, inclusion andunconscious bias.Analysing our internal talent review processes, wehave identified opportunities to develop talent in ourfemale middle management population. In addition,we have developed a programme to remove someof the barriers that our female employees may11 Johnson Matthey Gender Pay Gap Report 2019experience when trying to develop their careersand increase their chances of being consideredfor more senior roles in the organisation.Diversity and Inclusion is now embedded intoour induction processes and our leadershipdevelopment programmes. We also offer a rangeof Diversity and Inclusion training at all levels ofthe organisation, and unconscious bias trainingis now a prerequisite for all hiring managers.Standards and dataWe have improved our data capture on Diversityand Inclusion and gender balance when lookingat recruitment, turnover and availability ofinternal talent pipelines. Because we know thatdata is key to supporting our sustainability goal,we continue to work on further developing ourglobal data capabilities, to better enable ourprogress and decision making in this area.We aim to ensure that our policies support andencourage diversity and inclusion. We also trackengagement and enablement of our femaleemployees via an employee opinion survey.

What we are doingto eliminate the gapRecruitment andtalent managementWe continue to use gender neutral recruitmentpractices, using job adverts with gender neutrallanguage and diverse candidate shortlists.Our Talent Acquisition and Communicationsteams continue to transform our candidatecommunications and experience to ensure thatour Employee Value Proposition (EVP) resonateswith all our internal and external audiences andattracts a range of talent that is as diverse aspossible.To avoid adopting any gender pay bias that mayexist in the wider market on recruitment, wehave clearly established and applied pay policiesand pay ranges by function and job level.Our commitment to addressing gender bias atsenior management level is evidenced by thepositive changes in the gender balance at thatlevel, with females now representing 28% ofsenior management, up from 23% last year.12 Johnson Matthey Gender Pay Gap Report 2019Despite this positive shift, we know there is stillprogress to be made and we remain committed tofurther increasing the number of women we haveacross all of our disciplines and at all levels. Weactively manage careers and succession plans toensure balanced talent pipelines and identify underrepresentation so that strategies can be put in placeto address any imbalance.eligible for no less than 16 weeks of paid leavefollowing the birth or adoption of a child if theyare the primary caregiver, and two weeks if theyare the secondary caregiver.However, there is still much to do, and our goalnow is to improve the take up, by men andwomen, of these new policies and associatedbenefits.Flexible working and parental leaveWe want all employees at Johnson Matthey tobe able to build a successful career here withoutcompromising their life outside work, whetherthat be for family life, personal interests or otherinterests. In support of this, in 2018 we launcheda global flexible working policy and we continueto work to ensure it is embedded into our workingpractices across Johnson Matthey, enabling anyemployee to consider how, when and where theywork.2018 also saw the introduction of a global minimumstandard of parental leave. Employees are nowWe know that it will take timefor there to be meaningfulchange. We are committed tomaking progress and building aninclusive and diverse environmentso that Johnson Matthey is morerepresentative of the world in whichit operates.

DeclarationWe confirm the information and datareported are accurate as of the snapshotdate 5th April 2019 and in line with the UKGovernment’s Equality Act 2010 (GenderPay Gap Information) Regulations 2017.Annette KelleherChief Human Resources Officer,Johnson Matthey Plc

4 Johnson Matthey Gender Pay Gap Report 2019 Gender pay gap key facts The gender pay gap is the average difference in pay between men and women. Johnson Matthey is committed to being a meritocracy where men and women are paid fairly. Women currently represent 26% of our UK employees. Female representation is lower in our science, technology and

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