feminising the bonus culture? plus let’s not forget the tax angle
It’s no surprise, but the Chartered Management Institute recently revealed the difference between the bonuses awarded to women and to men. Much of the commentary suggested that the main reason for this is that women don’t ask aggressively enough for their bonuses. I’m sure this is indeed the case, and it fits directly under the PP Factor 3 (lack of self-confidence). I realise too that some of the answer is for women to be more assertive in making their claims.
But I have some hesitation around this, leaving aside (just for the moment) a general queasiness about the size of bonuses and how far they are functional. The suggestion is that women with a reasonable claim should behave more like their strident, pushy male colleagues. This may be necessary in the short term for them to gain the rewards that are due to them under the current regime. But it’s another example of apparently accepting a male norm, and drawing the conclusion that for women to ‘succeed’ they have to behave more like men.
This is akin to what Goran Esping-Anderson called the masculinisation of the lifecourse, ie that women are being pulled more and more into patterns of behaviour which resemble men’s. In the case of employment, this means working more on a full-time and continuous basis, with an equalisation of retirement ages. The latter is fine, but we need to get away from full-time continuous employment as the dominant model of employment, especially when it comes to what counts as commitment to work. Encouraging and enabling more men to follow discontinuous careers which are nevertheless recognised as careers is a huge challenge.
In The Mismeasure of Women Carol Tavris gives a general framework for thinking about this kind of issue. She discusses the ‘normalcy’ of man, the notion that things are to be measured by reference to the male sex. This, she argues, has generated three positions: that men are normal, and women different and therefore remain deficient; that men are normal, and women opposite and therefore superior; and that men are normal, and women should be more like them – what you might call the Henry Higgins position ( “Why can’t a woman/Be more like a man…..” ). Her case is that we should think instead of shifting the norm itself.
This applies to many of the implications of the PP – and to the bonus issue. If bonuses are supposed to be decided on reasonably objective grounds, how come so much depends on how loud anyone can shout? I would have thought the main lesson from the CMI findings is that the bonus system is much less rational than it is made out to be – and so its rationality should be improved and enforced, so that it genuinely recognises performance not size of mouth.
I’m not actually against bonuses per se, and do believe in rewarding performance, but this does allow me to have a further beef which is nothing to do with the PP. A change in the UK tax system brought down the top rate of tax this year, from 50% to 45%. As a consequence , many high earners deferred their bonus payments, obviously with the collusion of their employers. The result: the total payments in the finance and insurance industry went from £600 million in April 2012 to £1.3 billion this year.
This seems to me just a blatant case of tax avoidance – not illegal, but against the obvious intent of public policy. There is no doubt about what the tax regime was in the year that these people were earning their bonuses (if, of course, they truly ‘earned’ them); it was a top tax rate of 50%. Deferring the bonus had one aim only: to avoid paying that tax. Let’s do some over-simple calculation: of the £700m difference, assume that £500m is due to deferment (leaving £200m, generously, to be attributed to enhanced performance). A 5% tax difference on this is £25million – not great by City standards, but enough to pay off a couple of PFI disasters. I may be wrong, but I haven’t noticed the new breed of financial leaders, with their commitment to a culture change, commenting on this.