Pearson : Financial Document

Great Britain Gender Pay

Gap

2021 Report

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A message from Ali Bebo

At Pearson we are committed to closing the gender pay gap and ensuring we provide equal opportunities for our people, both men and women, to thrive in our company. Pearson's future strategy includes a commitment to invest in diverse talent and we understand that being an inclusive company is essential to our success.

Pearson has seen a continued year on year improvement in its Great Britain gender pay gap since reporting began in 2017. This year, our fifth year of reporting, we were disappointed to see that the median gender pay gap (as of the snapshot date of 5 April 2021) had increased to 13% (from 10% in 2020). In part, this reflects the fact that Pearson saw a disproportionate number of women leaving the business in Great Britain for different reasons and as a result of some senior roles moving to other geographies as the company develops a more globally diverse leadership footprint.

Whilst there are fewer women at the most senior levels in the company (currently 45% of senior leadership roles are held by women), this year we again reviewed individual pay levels for all senior roles finding that women in this group are paid either at or above market levels for comparable roles.

Furthermore, we are making changes to our UK recruitment practices to no longer ask for candidates' current pay details - only pay expectations - to ensure we are not perpetuating any existing pay inequities. This is already the common approach in the US where the majority of Pearson's workforce is employed.

Continuing our commitment to creating an inclusive and diverse workforce that represents all of our stakeholders, in 2021 and again in 2022 we have included a measure in our company-wide Annual Incentive Plan with targets for investing in a diverse talent pipeline and increasing representation at leadership levels. For 2022, the portion of the bonus relating to diversity targets will not pay out unless at least 50% of participants in internal leadership development and mentoring programmes are women and/or of ethnic minority background and women are represented in at least half of all leadership succession plans (as well as 20% ethnic minority representation).

Further information on Pearson's diversity goals is shown in the 2021 Annual Report which can be found here:https://plc.pearson.com/en-GB/investors/2021-annual-report-accounts

Ali Bebo

Chief Human Resources Officer

Ali Bebo

As the executive responsible for oversight of GB Gender Pay Gap reporting across all statutory entities, I confirm that the data and information presented in this report are accurate and meet the requirements of the Equality Act 2010 (Gender Pay Gap information) Regulations 2017.

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Our Great Britain Gender Pay Gap

Pearson reports pay gap data for all our employees in Great Britain regardless of whether or not they work in companies that exceed the reporting threshold of 250 or more employees.

Pearson has seven group legal entitles across Great Britain which operate a payroll. Together, they employ 3,377 people as at the time of publishing. We disclose our pay and bonus gender pay gap data for all employees as we believe this consolidated figure is the most meaningful and representative picture of our employee footprint in Great Britain.

Two group companies had 250 or more employees and so were within the scope of the regulations. Together, these two entities (Pearson Education Limited and Pearson Professional Assessments Limited) represented 80% of our workforce in Great Britain.

2021

% of GB employees included	100%
Median	Mean
Gender Pay Gap	13%	17%
Gender Bonus Gap	9%	53%

% of men and women receiving a bonus

Men	Women
70%	63%

% of women / men in each quartile	Women	Men
Lower Quartile	63%	37%
Lower Middle Quartile	62%	38%
Upper Middle Quartile	54%	46%
Upper Quartile	47%	53%

For full gender pay and bonus gap information for each reporting entity and the overall group, see page 4

2020

% of GB employees included	100%
Median	Mean
Gender Pay Gap	10%	17%
Gender Bonus Gap	14%	48%

% of men and women receiving a bonus

Men	Women
69%	64%

% of women / men in each quartile	Women	Men
Lower Quartile	61%	39%
Lower Middle Quartile	60%	40%
Upper Middle Quartile	56%	44%
Upper Quartile	47%	53%

To find out more about why we focus on the median pay gap and other questions, check out our FAQs on page 5

13%

Median hourly pay gap for GB employees

9%

Median bonus gap for GB employees

Statutory Great Britain gender pay gap disclosures

Company Name	Proportion of men and women by pay quartile
Upper Quartile	Upper Middle Quartile	Lower Middle Quartile	Lower Quartile
Women	Men	Women	Men	Women	Men	Women	Men
Pearson in Great Britain	3,377	47%	53%	54%	46%	62%	38%	63%	37%	17%	13%	53%	9%	63%	70%
Pearson Education Limited	1,815	53%	47%	57%	43%	63%	37%	61%	39%	9%	8%	49%	4%	94%	94%
Pearson Professional Assessments Limited	873	56%	44%	66%	34%	60%	40%	66%	34%	9%	3%	64%	6%	8%	18%

No. of employees

Meangender paygap

Median gender pay gap

Meangender bonus gap

Median gender bonus gap

Proportion of women receivinga bonus

Proportion of menreceiving abonus

For more information

We hope you have found this document of use and interest. If you have any questions, or thoughts on ways we can improve our gender pay gap reporting, we would be pleased to hear from you. You can email us [e-mail]

FAQs

What does the legislation require?	All legal entities with 250 or more employees must disclose: - Mean and median gender pay gap - Mean and median bonus gap - Proportion of women and men by quartile pay band - Proportion of men and women receiving a bonus - Pay gap data is based on hourly rates of pay as at 5 April 2021. Bonus data is for the 12 months prior to 5th April 2021.
What is a quartile pay band?	This divides the employee population into pay bands from the top 25% (quarter) and then each subsequent quarter down to the lowest paid.
Is gender binary?	Today, gender doesn't simply refer to man or woman and we recognise that a growing number of our people identify in different ways. However, the approach required by the regulations is to compare the pay of men and women. We have followed this approach for the purposes of this report based on the information provided by employees in respect of gender.
Is the gender pay gap the same as equal pay?	No. Gender pay is the difference between the gross hourly earnings for all men and the gross hourly earnings for all women. Equal pay is about men and women being paid equally for equivalent work.
Does Pearson pay men and women equally?	Equal pay is both a legal requirement and a matter of principle for Pearson. We use a career framework model to determine a position grade level and salary. Other factors that may influence pay for individuals at Pearson include performance and experience which are taken into consideration as part of the annual salary review process each year.
What proportion of Pearson employees are based in Great Britain?	Pearson is a global company employing 21,000 people in total. Of these, 3,377 employees, or 17%, are based in Great Britain. Pearson has made a commitment to disclose gender pay gap data for its global employees in our larger countries - a report we will publish later in the year.
What is the mean?	The mean is the average. In this case, it's the total of all hourly rates, divided by the number of employees.
What is the median?	The median is the midpoint. It's the middle value of the hourly rates for both women and men when listed in order.
Is the mean or the median a better way to assess how we are doing?	Many companies including Pearson typically use the median to assess how they are doing. About half of the employee population earn more than the median salary while half earn less. The distribution of pay among employees is usually skewed, meaning that the highest paid employees earn significantly more than the lowest paid, so the mean / average tends to be much higher than the median.
Are Pearson numbers impacted by the furlough scheme? GB Gender Pay Gap Report | Pearson 2021	No. Pearson did not access the Coronavirus Job Retention Scheme. 5