French judges tell BNP Paribas to fix women’s unequal pay

Bloomberg

BNP Paribas SA was told by French judges it shouldn’t have excluded bonuses from its calculations to close the gender pay gap, in a ruling that’s likely to have ramifications for the local banking industry.
A Paris court criticised BNP for only using women’s base salary as a comparison with the median for men in the same jobs, a similar level and age bracket. The methodology isn’t in line with legal provisions aimed at eliminating unequal pay, they said.
The case echoes similar criticism BNP faced in the UK earlier this year as a female broker in London paid less than her male peers was awarded $2.25 million by an employment judge who chastised the bank’s “opaque pay system” and ordered a first of its kind equal pay audit.
“The principle of equality between women and men would require taking into account the discretionary part of the salary to allow a true comparison of the effective pay of men and women at the company,” the Paris judges said in a previously-unreported ruling.
Moreover, the impact of the ruling may be felt across the banking system in France as other large lenders including Societe Generale SA and Credit Agricole SA’s investment banking unit CACIB focus solely on base salaries in their efforts to close the gender pay gap.
BNP said in a statement that it’s analysing the ruling. The bank said its has been paying “particular attention” to equal pay since 2004. It has earmarked about $9.8 million to promote gender diversity and increase the salaries of its underpaid female staff in France for 2023 and 2024.
In 2020 and 2021, BNP Paribas was awarded a score of 87%, while Societe Generale scored 86% and CACIB 85% both years. For those years, none of the banks were given any points for the presence of women among their top earners.
Female representation remains low in European banking industry, with women representing only 26% of major European banks’ executive teams in 2021, according to a study by DBRS. In France, women make up 42% of the country’s banks’ boards, but only 31% of their top executive ranks.
In the past two years not a single female chief executive officer has been appointed by one of Europe’s top 30 banks, despite almost half of the CEOs in that group being replaced in the same time frame.

The CFDT union said the agreements the bank signed with staff representatives between 2013 and 2020 “have proven ineffective given the persistence of pay differences to the detriment of women,” according to the ruling.
The judges said the CFDT was right in arguing that taking into account variable compensation “is all the more relevant given that the gaps in remuneration are higher when it comes to variable pay.”
Spokespeople for Credit Agricole and Societe Generale declined to comment on its outcome.