BNP Paribas 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 criticized 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 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 — for equal work, equal pay — 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 dated Sept. 27.
Moreover, the impact of the ruling may be felt across the banking system in France as other large lenders including Societe Generale, Credit Agricole's investment banking unit CACIB and BPCE's Natixis focus solely on base salaries in their efforts to close the gender pay gap.
BNP said in a statement that it's analyzing the ruling.
The bank said its has been paying "particular attention" to equal pay since 2004. It has earmarked about €10 million ($9.8 million) to promote gender diversity and increase the salaries of its underpaid female staff in France for 2023 and 2024.
Companies in France are required to publish a score out of 100 on their gender diversity commitments. As many as 40 points are awarded to reflect a smaller gender pay gap. The gap in yearly pay raises makes up as many as 20 points. Another 15 points show the gap in promotions. Increases for female employees coming back from maternity leave are marked out of 15 too. An allotment of 10 points goes to reward the presence of women among the company's 10 largest earners.
In 2020 and 2021, BNP Paribas was awarded a score of 87%, while Societe Generale scored 86% and CACIB 85% both years. Natixis improved its 2020 score, gaining one point to 87% in 2021. For those years, none of the banks were given any points for the presence of women among their top earners.
'Wiggle room'
Sophie Binet, an executive at the trade union CGT, says that the index isn't reflective of reality as companies are provided with "a lot of wiggle room on the calculations terms."
"The banking sector is the one where there are the most pay gaps," Binet said. "This comes from the importance of variable pay, which are very discriminatory toward women."
The CFDT union, which brought the case against BNP, 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."
Female representation remains low in the European banking industry, with women representing only 26% of major European lenders' executive teams in 2021, according to a recent 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
Spokespeople for Credit Agricole, Societe Generale and Natixis declined to comment on the ruling.
