by Amadea Hofmann and William Goltz
Editor’s Note: This article is the second in the ‘Working at LSE’ series, a series designed to explore LSE’s working conditions, policies, and culture. If you or someone you know would like to share their experiences working at LSE with The Beaver, please contact features.beaver@lsesu.org.
An investigation by The Beaver has found that male academics at the London School of Economics receive, on average, almost three times bigger bonuses than female academics.
The 2021 LSE Gender Pay Gap Report reveals a stark gender pay gap concerning the bonus pay awarded to staff. Crucially, these bonus discrepancies have no effect on LSE’s declared overall gender pay gap.
The Beaver found that the bonus pay structure at LSE enables the School to conceal the true extent of gender pay disparities and rewards staff who are communicating an intention to leave the workplace, rather than committed staff.
Over the past five years, LSE’s median gender pay gap has been steadily decreasing. In contrast, the mean gender pay gap has stayed roughly the same, with there being an approximately 24 percent difference in pay between genders. Importantly, both the median and mean indicators exclude bonus payments in their calculations of the gender pay gap. If bonuses were included in general calculations, the overall gender pay gap at LSE would be much worse than the official figures published.
To examine the bonus pay gap disparity, The Beaver reviewed the LSE Pay Gap Reports which have been published annually since 2017, when the government mandated that universities should publish their pay gap data. The graphs below illustrate the differences in bonus pay between genders; using calculations of the gender pay gap both including and excluding bonus considerations.
The analysis provides a rare look inside what the gender pay gap at LSE actually is.
Despite men and women both having similar rates of receiving bonuses (38.57 percent and 34.35 percent respectively), the gender pay gap has increased ten-fold. While the difference in total bonus pay between genders was £332.49 in 2017, it increased to £3,763.70 in 2021.
Since LSE does not account for bonuses in the gender pay gap, the gender pay gap is actually 6.83 percent worse than what is officially published – or in real terms, instead of men earning £7,727.45 more, they actually earn £11,491.15 more than women.
It is important to note that although The Beaver used the average bonus amount in its calculations, naturally, not every academic receives the same bonus, if at all.
LSE awards a variety of bonuses, the most common of which are ‘performance supplements.’ These accounted for 51 percent of all bonuses awarded in 2021. According to an LSE spokesperson, performance supplements are a recognition that “an academic may be on a career trajectory which makes them highly attractive to other employers.” The term ‘performance supplements’ is misleading, however, as they do not reflect the actual performance of academics.
When asked to clarify the terms and their differences, an LSE spokesperson defined market supplements as applying to “certain disciplines, fields or specialist areas there are recruitment and retention difficulties that need to be addressed by the application of attraction and retention premia.”
Their usage continues to support a system of bonus pay in which it seems that an academic’s contributions to the School are significantly less rewarded than their efforts to seek employment elsewhere, as male academics are more likely to do.
“If you’re somebody who only cares about income,” said Dr Grace Lordan, the Director of the Inclusion Initiative, “as soon as you enter the LSE, you’re thinking ‘well, what’s the next way that I can buck my income? And that is either to threaten to leave or to actually leave.’”
To be rewarded through LSE’s bonus pay structure, it seems, academics must prioritise their external career prospects over their contributions to the school.
Despite the School’s assertions that performance supplements are “subject to performance criteria and review periods and can be taken away if the performance is unsatisfactory,” they do not appear to operate significantly differently from the market supplements (more explicitly linked to market competition) that they have been intended to replace.
If performance supplements were used as a genuine reward for internal contribution, they could significantly reduce the bonus pay gap. As Dr Lordan has explained, the School would be able to “increase the bonus pool that’s been distributed equally among men and women at the moment, and allow those rewards to be bigger.”
Furthermore, The Beaver’s efforts to seek clarification from the LSE Human Relations department, which is responsible for the drafting of the Pay Gap Reports, have not been straightforward.
It was initially possible to confirm the date and time of an interview with members of the Human Relations department, as well as confirmation from the executive secretary of the Vice President and Pro-Vice Chancellor of Faculty Development that he was willing and able to answer questions. However, once the topic of these interviews was clarified, all promises of cooperation were rapidly rescinded.
Following these efforts, an LSE spokesperson provided a brief statement of the LSE’s position, which was prefaced with the declaration that “unfortunately, no one at the School is available for interview.”
This statement only repeated many of the statements found in the Pay Gap Reports. Its emphasis on the fact that LSE’s median salary gap is “lower than the UK national average” ignores the fact that the School’s mean salary pay gap is three times higher than the UK average if bonuses are taken into account.
Rejecting any suggestion that a reliance market pressures for determining supplements is responsible for increasing the bonus pay gap, the School insists that progress will only be made in addressing the bonus pay gap “with more women in senior positions across LSE, specifically in academic disciplines that attract a higher market rate and have a greater prevalence of supplements.”
It appears that LSE is hesitant to take a proactive approach towards addressing the bonus pay gap. In the 2021 Pay Gap Report’s concluding section concerning its “ongoing actions,” no mention is made of retention pay, despite it clearly being the factor with the most obviously negative impact on pay inequality.
Based on the statement from an LSE spokesperson, it appears the School does not consider the current system of bonus pay to be flawed, despite the fact that the implementation of performance supplements has coincided with a significant impact in the bonus pay gap.
At a time when members of the University and College Union (UCU) are taking action against the current state of pay, working conditions, and pension cuts, the issue of the gender pay gap at LSE is more pertinent than ever. As the job market for academics grows increasingly stagnant, LSE seems to be provided with a rare opportunity to focus its bonus system on fairly rewarding the contributions of academics to the community, rather than the efforts of academics to leave it.
Listen to the companion podcast, and hear from Amadea and William about the behind-the-scenes of their investigation:
