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by Derek Loosvelt | August 26, 2020


Each year, Vault surveys thousands of investment banking professionals, asking them to rate their firms in several workplace categories. Today, on Women's Equality Day—which commemorates the passing of the 19th Amendment, giving women the right to vote—we took a close look at the differences between how male and female professionals rated their firms in our annual Banking Survey over the past decade. Our aim was to capture a snapshot of the current state of gender equality on Wall Street and find out how gender equality has changed (for the better or worse) over the past 10 years. Below, in four charts, is a summary of what we found. 

1. Commitment to Diversity with Respect to Women

In our annual survey, we ask bankers to rate their firms in racial diversity, LGBTQ+ diversity, and diversity with respect to women. When we ask about gender diversity, we specifically ask banking professionals to rate their respective firm's "commitment to diversity for women" on a scale of 1 to 10, where 1 is "needs a lot of improvement" and 10 is "exceptional."

As you can see in the above table, from 2010 to 2014, there was an upward trend in the ratings given by both men and women, with women's ratings rising by more than 14 percent over the four-year period. However, from 2014 to 2017, there was a downward trend in women's ratings (women's ratings fell by 7 percent), while men's ratings fell, rose, then fell again. Since 2017, ratings by men and women were back on the rise, signaling that, in the past few years, banking firms have been doing something right when it comes to improving gender equality. 

And indeed, in the past few years, Wall Street firms have been focusing on expanding their diversity affinity groups and networks, and going to lengths to ensure that entry-level analyst and associate classes have high ratios of women to men. In fact, more than a few firms' analysts classes now have an equal number of women and men. However, it's somewhat disappointing that ratings given by women in this category peaked in 2014 and have dropped 4 percent since. 

Also disappointing is the gap between men's and women's ratings. In 2014, the gap was just over 2 percent, but in 2019, our latest survey, the gap widened to nearly 9 percent—a nine-year high. Which signals a significant disconnect between how men and women view gender equality initiatives at their firms.

2. Quality and Utility of Informal Training and Mentoring Programs

Informal training and mentoring is an extremely important category when it comes to retaining, promoting, and providing women with opportunities to take leadership positions within firms. Often, the general lack of women at banks is blamed on the lack of women in leadership roles at banks, making informal ("on-the-job") training and mentoring even more important.

As you can see in the above table, from 2010 to 2016, there was a strong upward trend in the ratings that both men and women gave their firms in this category. However, since then, there's been a steady downward trend in women's ratings, while men's ratings have risen. This doesn't bode well for two reasons.

One is the obvious fall in ratings that women have given their firms. Women's ratings peaked in 2016 at 8.168 and have fallen by 7 percent since then to 7.656—a seven-year low. The second is the rising gap between men's and women's scores. In 2016, the gap was just 3 percent, but now, just a few years later, it's nearly 14 percent. That's a huge gap, signaling that there are major differences between how men and women experience on-the-job training and mentoring at their firms.

3. Satisfaction with Promotion Policies

When we ask about promotion policies, we specifically ask professionals to rate their satisfaction with their firm's promotion policies on a scale of 1 to 10, where 1 means "very dissatisfied" and 10 means "very satisfied." This category, like informal training and mentoring, is a good indicator of how firms are doing when it comes to offering opportunities to rise into leadership positions.

As the table above shows, there are similarities between the ratings given to promotion policies and those given to informal training and mentoring. For the majority of the past decade (we only starting asking about promotion policies in 2012), there's been a steady rise in both men's and women's ratings in this category. However—and here's the big difference between the two categories—women's ratings of promotion policies spiked in 2019, while significantly closing the ratings gap.

In fact, women's scores rose 7 percent in a single year, and while there was a 9 percent gap between men's and women's ratings in 2018, that gap narrowed to 2 percent in 2019. Which is very encouraging, possibly pointing to good news in the coming years for women when it comes to rising Wall Street's ranks.

4. Satisfaction with Compensation

When we ask banking professionals about their compensation, we specifically ask them "to rate their satisfaction with their monetary compensation, including signing bonuses, year-end bonuses, and other financial incentives." Professionals rate their firms from 1 to 10 where 1 means "very dissatisfied" and 10 means "very satisfied."

As illustrated in the table above, there's a general upward trend in both men's and women's ratings over the past decade. Which indeed is a positive sign for women and for gender equality. However, the table also illustrates the increasing gap between men's and women's ratings, from 3.4 percent in 2010 to 7.8 percent in 2019. While this gap merely represents the difference in "satisfaction with comp" and not actual comp amounts, it points to a problem still facing women on Wall Street: the lack of pay parity. By some recent counts, women still make nearly 30 percent less than their male counterparts on the Street. 

Also of note in the above table is the nosedive ratings took in 2012. This was, in large part, due to the nosedive in bonuses in 2011 thanks to the financial crisis, which caused a recession. It was a time when banks didn't have much cash on hand, meaning bonus pools were dry. It was also a time when banks began experimenting with bonus clawbacks and putting a high percentage of bonuses in stock, neither of which were very popular with bankers.

Although what the latest economic setback—the global pandemic—will do to banks' bottom lines in the next few quarters remains to be seen, the second quarter of 2020 was certainly a dark one for most banks. However, there were some bright spots.

A final note

Although the general upward trend in women's ratings in our surveys over the past decade is a sign to cheer, the rising gap between men's and women's ratings is a sign to fear. Indeed, judging by the above, Wall Street has been making progress when it comes to gender equality but still has a long way to go when it comes to achieving true equality.

There are also these unfortunate numbers (not shown above): In 2010, of those professionals who took our survey, 74 percent identified as men and 26 percent identified as women. And in 2019, nearly a decade later, the percentages were more or less the same: 76 percent identified as men and 24 percent as women. Also consider that the percentage of women taking our survey in a given year peaked in 2014, at 30 percent. In comparison, women now make up slightly more than 50 percent of the U.S. population and 56 percent of all U.S. college graduates.

The takeaway here is that although our surveys are by no means complete demographic representations of investment banking in a given year, the low percentage of women taking our surveys indicates that the industry needs to work a lot harder when it comes to hiring, retaining, and promoting women.