Rio Tinto’s commitment to pay equity
Rio Tinto strives to create an inclusive culture where all people are heard, valued and respected. We embrace workforce diversity and value differences. Consistent with our vision for inclusion and diversity, we are committed to ensuring that employees with similar skills, knowledge, qualifications, experience and performance are paid equally for the same or comparable work.
Both the ‘equal pay gap’ and the ‘gender pay gap’ measure pay differences between women and men in the workplace, but they measure two different things:
- An ‘Equal Pay Gap’ arises when men and women employed by the same company, in the same location, performing equal work, do not receive the same pay.
- The ‘Gender Pay Gap’ is a measure of the difference between men’s and women’s average earnings across an organisation or industry, regardless of the roles that each are performing. It is normally expressed as a percentage of men’s earnings.
Equal Pay is at the core of Rio Tinto’s approach to pay equity. We use a like-for-like approach to measure and monitor Equal Pay across the Group (irrespective of the regulatory requirements and methodologies that we are required to adopt for local reporting). This means that we compare the pay of employees performing the same roles in the same location or country.
This like-for-like approach is used for all jobs where both females and males are represented, and it is weighted based on the number of female incumbents in each job. A positive percentage indicates an Equal Pay Gap in favour of men. A negative percentage indicates an Equal Pay Gap in favour of women. Rio Tinto’s Equal Pay Gap on 1 February 2018 was 3%*. Rio Tinto will continue to monitor Equal Pay to ensure that any differences are due to legitimate factors, and will take action as appropriate.
Gender Pay Gap
The Gender Pay Gap, unlike Equal Pay, is also influenced by the relative seniority of men and women in an organisation or industry. Across the entire Group, the Gender Pay Gap on 1 February 2018 was just under 1%*. However, this apparently good result for the Group as a whole reflects the large sample size and masks a less favourable position at our head office in the UK. Across the entire workforce, as the Equal Pay Gap suggests, there is relatively little difference between the average pay of men and women, but there is still a relatively low level of gender diversity in the most senior management positions. Rio Tinto is addressing this issue through a number of initiatives, including a target to increase the representation of women in senior management roles by 2% year on year, and for women to represent 50 per cent of our graduate intake in 2018.
Both the Equal Pay Gap and the Group-wide Gender Pay Gap are measured and monitored on a voluntary basis by Rio Tinto, in parallel with country-specific mandatory reporting requirements. Under UK regulations, while none of our UK employing entities meet the minimum reporting threshold of 250 employees, details of the Gender Pay Gap for the largest entity (Rio Tinto London Limited) have been voluntarily disclosed.
* Note: Defined as full time equivalent, contractual base salary; excludes Pacific Aluminium due to insufficient data being available
UK-specific “gender pay gap” disclosures
The methodology required by the new UK regulations differs from Rio Tinto’s approach to assessing gender pay equity.
The UK methodology calculates the difference in average pay and bonuses between all male and female employees within an employing entity. It is expressed as a percentage of men’s earnings. This differs from Equal Pay which means that men and women in the same employment performing equal work must receive equal pay.
Rio Tinto is not obliged to publish the “gender pay gap” report for any of its UK employing entities for 2017, as none of these entities reach the minimum reporting threshold of 250 employees. However we have chosen to voluntarily publish figures for the largest employing entity in the UK, Rio Tinto London Limited, as set out below:
Rio Tinto London Limited gender pay gap metrics (UK Government Methodology)
|Gender Pay Gap disclosable metrics (see below for definitions)
|Mean hourly gender pay gap as at April 20171
|Median hourly gender pay gap as at April 20171
Mean bonus gender pay gap for the year ending 5 April 20172
Median bonus gender pay gap for year ending 5 April 20172
|Proportion of males receiving a bonus payment
|Proportion of females receiving a bonus payment
|Proportion of males and females in each quartile pay band as at April 2017
|Lower Pay Quartile
|Lower Middle Pay Quartile
|Upper Middle Pay Quartile
|Upper Pay Quartile
1Indicates by how much women’s mean/median hourly rate is lower than men
2Indicates by how much women’s mean/median bonus is lower than men
Definitions used for UK disclosures in table above
|Mean/Median Gender Pay Gap
||Difference between the mean / median hourly rate of pay paid to male and female employees (employees whose pay has been reduced as a result of leave and therefore are not "full-pay relevant" are excluded from the analysis). A positive value indicates that the males' hourly pay is higher than the one of females.
|Mean/Median bonus Gender Pay Gap
||Difference between the mean / median bonus pay paid to male and female employees (employees not in receipt of a bonus are excluded from the analysis). A positive value indicates that the males' bonus is higher than the one of females.
|Prop. males/females receiving bonus
||Proportion of male / female employees who were paid a bonus
|Prop. males/females in each quartile band
||Proportion of male / female employees in four quartile bands, which are calculated by dividing the employee population into four equal parts
Commentary on results for Rio Tinto London Limited
Gender pay gap calculations, including the UK pay gap methodology, are deeply influenced by the seniority of men and women in an organisation and industry.
Women continue to be under-represented in senior roles at Rio Tinto, and this is evident in Rio Tinto London Limited, where employees are primarily located in a small corporate office in London, which contains some of the most senior roles in the company. As female representation at senior levels is lower, this proportionally affects the size of the UK pay gap metrics. The approach to addressing this in the UK is the same as our global goals, including targets to increase the representation of women in senior management positions by 2% year on year and for women to represent 50 per cent of our 2018 graduate intake.
Hourly pay gap
The hourly pay gap is a reflection of the number of women in senior roles at Rio Tinto London Limited, as evidenced by the percentage of women in roles paid in the upper quartile or middle upper quartile.
It is worth noting that the reported level of Gender Pay Gap is not evident when there are equal numbers of men and women at a given level of seniority. For example, in middle management and middle professional roles, which are the most balanced in term of gender representation in Rio Tinto London Limited, the mean Gender Pay Gap is -2.8% and the median pay gap is -5.6% in favour of females. This illustrates that where the gender representation is balanced, the Gender Pay Gap is slightly in favour of women.
The ‘bonus’ primarily includes the value of short (STIP) and long term (LTIP) incentives.
Individual and business performance is used to determine the level of STIP awards. Rio Tinto drives consistency and fairness checks on individual performance as part of the performance review process. However, individuals reaching the same performance rating, receiving the same salary, and the same STIP opportunity, may not receive the same STIP cash award where the performance of their respective business units is different.
Consistency and fairness checks are also conducted annually on LTIP awards as part of the Annual Remuneration Review.
There is virtually no difference between the number of males and females receiving ‘bonuses’ during the relevant reporting period (6 April 2016-5 April 2017). The variation in the ‘bonus’ gap is primarily driven by a higher representation of men in upper bands, which attract higher salaries, STIP and LTIP opportunities in the UK market.