Pearson : Financial Document

Gender

Pay Gap

Report

2020 Annual Report

Great Britain

A Message From

Anna Vikström Persson

2020 was a pivotal year for diversity, equity

and inclusion. First up, Covid-19 upended the way we work. Work-from-home is now the norm, impacting how we communicate, connect and co-create. As we look forward to the future of the 'office', it is looking increasingly likely that a new hybrid way of working will emerge - this has huge potential to contribute as a great leveller in terms of gender equality and diversity.

2020 was also the year that systemic racism in society and its role in holding back Black and other ethnically diverse people from fulfilling their potential truly got the attention it deserved. Education is a powerful force for equity and change in our world and Pearson has responded by setting a series of ambitious company-wide goals underpinned by a robust action plan. As part of our plan, we established a new Chief Diversity Officer position and will invest in an expanded diversity team to accelerate our work on eliminating barriers for all our people to achieve their full potential.

This is our fourth gender pay gap report and I'm pleased that we can again report progress made in creating more opportunities for women at the

more senior levels of the company. Pearson's overall median gender pay gap report as of the snapshot date of April 5th 2020 is now 10%. This represents a 5% narrowing since our first gender pay gap report.

Nevertheless, there is still much work ahead. Our robust action plan continues to guide us as we drive investment towards the hiring, retention and development of our female employees. Critical is raising awareness of the unique challenges faced by women in the workplace including the specific issues of LGBTQ+, BAME and disabled women as well as those with children, elderly parents, and other caring obligations. We work closely with our leaders and our employee resource groups to foster a culture of inclusion at every level.

In this report, we reaffirm our commitment to diversity, equity and inclusion and set out the steps that we are taking to address the gap across our company operations, not just in Great Britain, but globally. Later this year, we will publish a global gender pay gap report for our larger countries fulfilling a commitment we first made three years ago to voluntarily extend our gender pay gap reporting.

"2020 was a pivotal year for diversity, equity and inclusion"

Anna Vikstӧm Persson

Chief Human

Resources Officer

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Our 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.

A note about the data

Pearson has seven group legal entities across Great Britain which operate a payroll. Together, they employ about 4,000 people as at the time of publishing. We disclose our pay and bonus 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.

Three group companies had 250 or more employees and so were within the scope of the regulations. Together these three entities (Pearson Education Limited, Pearson Professional Assessments Limited and TQ Education and Training Limited) represented 87% of our workforce in Great Britain.

For full gender pay and bonus gap information for each reporting entity and the overall group, see page 11.

Pay Gap		2017	2018	2019	2020
Percentage of
GB employees			94%	100%	100%	100%
included
	Median	Mean	Median	Mean	Median	Mean	Median	Mean
Gender Pay Gap	15%		21%	14%	21%	12%	19%	10%	17%
Gender Bonus	18%		52%	12%	49%	21%	48%	14%	48%
Gap
	Men		Women	Men	Women	Men	Women	Men	Women
Proportion of
men and women	64%		63%	70%	63%	70%	69%	69%	64%
receiving a bonus

10% 14%

Median hourly pay gap for	Median bonus gap for
GB employees	GB employees

To find out more about why we focus on the median pay gap and other questions, check out our FAQs on page 12.

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Why do we have a gender pay gap?

The gender pay gap is a measure of the difference between mean and median earnings of men and women across the company.

Analysis of the data shows that the explanation for the gender pay gap at Pearson in Great Britain is primarily a result of fewer women having advanced into senior level roles.

Pearson uses a career framework to provide consistency on how we assess and grade our people. In addition to the Pearson Executive, we employ eight standard job grades from entry-level (A) through to senior leadership (G and H). Within our standard job grades, we have:

• More women than men below Vice President (VP) level (F in our career framework)
• Fewer women than men at VP level and above

Narrowing the gap

Our gender pay gap shows we need to focus on eliminating barriers for all our people to fulfil their potential. We need to do more to create opportunities for women to progress to bigger and broader roles. We set out our action plan to narrow the gap on page 5.

Understanding the size of the challenge we face means we can accelerate the pace of the change we need to see.

What progress has there been in 2020 compared to 2019?

Our headline gender pay gap has fallen 2% over the 12-month reporting period - our third year-on-year reduction. While the progress is positive, we still expect that addressing the gap will take time. During the period, we have seen the following shifts:

• One third of our Executive Management team in the UK are women as are 43% of our senior leaders (G and H)
• Over half of the 2020 cohort of people on our apprenticeships scheme are women (57%)

2%

Our 2020 median gender pay gap has fallen 2% compared to 2019

What else has Pearson done to further gender equality?

In 2020, Pearson launched our Gender Equality Guidelines, a first-of-its-kind commitment by a learning company to tackle gender bias and stereotyping in education. The purpose of the guidelines is for use by Pearson in developing future textbooks, digital resources and qualifications supporting children across the UK to learn with gender-equal resources. The guidelines were created by our employee resource group focused on gender in close collaboration with The Fawcett Society, the leading voice in fighting gender inequality in the UK, who provided independent guidance, feedback and training. When creating the guidelines, Pearson recognised the importance of designing them to be respectful and inclusive of women, men, and people with non-binary identities.

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Our plan to address the gender pay gap focuses on five key areas:

1	Professional development, support and mentoring;
2	Encouraging the empowerment of women and the
	formation of networks;
3	Improving recruitment and pipeline management
	to enhance senior female representation;
4	Shaping our policies and culture around returning
	to work and flexible working; and,
5	Ensuring the consistent engagement of Executive
Management and senior leaders.

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