2/6 Foreword Fast facts Diageo plc At Diageo, our ambition is to become one of the most trusted and respected consumer products companies in the world. We are driven by a core belief that successful businesses are those that harness the benefits of a truly inclusive and diverse culture. Since announcing our first gender pay gap report in 2017, we have made progress towards closing our pay gap. In 2018, our median pay gap improved to 5.4% (2017: 8.6%) for Diageo employees across all legal entities in Great Britain and Scotland. In our Great Britain business, the median gender pay gap was -12.6%, down from -9.8% in 2017. In Scotland, in our 24/7 manufacturing business, our gender pay gap increased to 18.0% from 16.7% in 2017. Closing the gender pay gap in our Scotland business will take time. I am confident we have the right plans in place to achieve this. Women currently hold 34% of our global senior leadership roles and we are making progress towards our goal of 40% by 2025. We are proud that women make up 40% of our Executive Committee. Following the retirement of two Non-Executive Directors in September 2018, three out of eight board positions are held by women. We intend to restore gender parity in due course. In this report, we provide gender pay gap information for both our Great Britain and Scotland businesses. We identify the causes of the pay gap and outline our on-going plans for closing this gap by removing barriers, challenging stereotypes and creating opportunities, particularly for women, in roles more likely to be filled by men. We are clear on our ambition to have balanced gender representation across the broad range of roles in our business and make Diageo the UK company women want to join. Thomson Reuters Diversity & Inclusion Index 2018 4 th Most Diverse and Inclusive Workplace globally in Thomson Reuters Diversity & Inclusion Index 2018 Executive Committee Senior leadership 34% of our global senior leadership team are women and we aim to achieve 40% by 2025 Our Board 40% of our Executive Committee are women 3 out of 8 Board Directors are women This year in our Scotland business, we have recruited more women than men into entry level roles; 50% of all promotions were women; 66% of graduates hired were women; and we placed female science undergraduates in our innovation lab in Menstrie. We have also announced the creation of a Diageo scholarship programme, in partnership with Heriot-Watt University in Edinburgh. These scholarships aim to encourage more women into Science, Technology, Engineering and Mathematics (STEM) careers and provide a pipeline of talent for the future in areas specifically related to our business. Ivan Menezes Chief Executive Mairéad Nayager Chief Human Resources Officer Graduates 66% of graduates hired in Scotland in 2018 were women Number of employees 4,500 employees across Great Britain & Scotland
3/6 Measuring the pay gap The gender pay gap shows the difference in average pay between women and men. It does not measure equal pay, which relates to what women and men are paid for the same or similar jobs or work of equal value. Calculating our numbers Under the UK Government s Gender Pay Gap regulation, companies need to report their gender pay gap for all legal entities in Great Britain with more than 250 employees. Diageo employs approximately 4,500 people across Great Britain including the legal entities covered by the regulation: Diageo Great Britain (1,300) and Diageo Scotland (3,100). Diageo Great Britain employs those involved in support and global functions, the packaging of beer and the distribution, marketing, import and sale of beer and spirits. Diageo Scotland is primarily a 24/7 manufacturing business and employs those involved in the distillation, warehousing, maturation, bottling and packaging of Scotch whisky and other spirits. We are also providing combined gender pay data for all employees across Great Britain, which includes employees in legal entities with fewer than 250 employees. Our figures exclude our employees in Northern Ireland, as Northern Ireland is not covered by these reporting regulations. In this report we are sharing the median and mean (average) pay gaps between men and women s hourly pay and bonuses. How we calculate the median difference Lowest hourly pay Median hourly pay The difference = How we calculate the mean difference Highest hourly pay Number of male employees Number of female employees = = Mean male average pay The difference = Mean female average pay Mean hourly pay gap
4/6 Understanding our pay gap Diageo Great Britain and Scotland combined (Includes all employees across Diageo Great Britain legal entities) 5.4% 2017: 8.6% Median bonus pay gap 14.0% 2017: -275.9% Mean hourly pay gap -3.5% 2017: 0.6% % receiving a bonus payment % employees Mean bonus pay gap 22.5% 2017: 20.9% 47.4% 69.9% 63.1% 36.9% Diageo Great Britain Great Britain employs 1,300 people across support and global functions, the packaging of beer, and the marketing and sales of beer and spirits. The higher median hourly rate for women continues to be driven by more junior level roles in field sales and manufacturing being filled predominantly by men, whilst office based roles, which are typically higher paid, are filled by women. The further decrease in our median pay gap was the result of success in recruiting more women into senior leadership positions. In 2018, we continued our efforts to attract women into manufacturing and sales roles (outlined on page 5) which are traditionally occupied by men. Whilst we have seen some improvement this year, there is more work to be done. The median bonus pay gap for this year was 9.3%, down from 12.3% last year. This was driven by hiring more women into senior leadership roles which attract higher bonuses and an annual long-term incentive share grant. Diageo Scotland Our business in Scotland is a 24/7 manufacturing business that includes distilling and packaging sites along with warehousing operations, our cooperage and our coppersmith workshops. In 2018, our median hourly pay gap increased to 18.0%. This was due to a reduction in the number of women opting for shift allowances for unsociable hours; more women than men being recruited into entry level roles; and the continuing long-term trend of manufacturing roles being filled by men. In 2018, we have also seen a significant shift in our bonus pay gap due to a change in bonus structures for a large proportion of our manufacturing employees. We ve made progress this year in introducing initiatives (outlined on page 5) that will help us to close the gap in this business, over time. 2017: 91.9% 2017: 93.6% 2017: 63.9% 2017: 36.1% We are pleased to have seen an improvement across our combined hourly median pay gap for our businesses in Great Britain and Scotland. This improvement was driven by our business in Great Britain where in 2018, we recruited more women into senior leadership roles. Our overall pay gap is largely driven by our business in Scotland, a 24/7 manufacturing business that has a predominantly male workforce, consistent with trends in the broader manufacturing sector. This year, we have recruited more women than men into entry level roles in our Scotland business; 50% of all promotions were women; 66% of graduates hired were women; and we placed female science Numbers as at 5 April 2018 undergraduates in our innovation lab in Menstrie. The significant change in our bonus pay gap for 2018 can be attributed to a change in the bonus structures for a large proportion of our manufacturing employees. We are working hard to break down gender stereotyping, which will help ensure we are building balanced gender representation across our business for the future. Developing a strong, talented pipeline of future female leaders underpins our firm belief that a more inclusive and diverse workforce helps our business to thrive. -12.6% 2017: -9.8% Median bonus pay gap 9.3% 2017: 12.3% 2017: 86.3% Mean hourly pay gap -2.1% 2017: 4.1% Mean bonus pay gap 18.8% 2017: 23.5% 2017: 51.1% 18.0% 2017: 16.7% Median bonus pay gap 53.7% 2017: -263.1% 2017: 93.6% Mean hourly pay gap 10.4% 2017: 11.3% Mean bonus pay gap 30.7% 2017: 9.6% % receiving a bonus payment % employees % receiving a bonus payment % employees 85.9% 53.3% 33.7% 67.7% 2017: 68.0% 88.4% 46.7% 58.0% 32.3% 2017: 91.8% 2017: 48.9% 2017: 94.4% 2017: 32.0%
5/6 Closing the gap We know that achieving our ambition of closing the gap will take time. We have made good progress against the actions we outlined in 2017 and have introduced new initiatives to support change, particularly in our manufacturing business in Scotland. Six female students at Heriot-Watt University will benefit from new Diageo Scholarships. Encouraging women into STEM: In 2018, we announced two, new scholarships to attract women to study Engineering, and Brewing and Distilling at Heriot-Watt University in Edinburgh. The Diageo Scholarships aim to encourage more female students into Science, Technology, Engineering and Mathematics (STEM) careers, in areas specifically related to our business. Over each of the next three years, the scholarships will provide two women studying a BSc in Brewing and Distilling or an MEng in Mechanical Engineering with paid internships, mentoring from senior women in our manufacturing business and an annual grant for the duration of their degrees. Also new in 2018, is our work with Careerwise, a Scottish organisation that specialises in placing women in internships in STEM based roles. Through this initiative, we hope to encourage five female interns to gain work experience across Engineering, and Distillation and Maturation roles in Scotland, which traditionally attract men. Leadership development: Our Women in Leadership and Supply programme continues to receive excellent feedback. In 2018, 312 women across our supply business took part in the programme and 350 women have registered to take part in 2019. Diversity training: We are currently rolling out diversity training to all senior leaders in our Scotland and Great Britain businesses. Flexible job design: We continue to build our internal job share portal, which aims to break down barriers for employees who do not wish to work full time. Maternity support: We continue to offer coaching to women before, during and after maternity leave to retain talent in our business. This includes webinars to help women and men consider how best to balance work and family life. We also have a programme of volunteer buddies who partner with parents returning to work. Recruitment: In our Great Britain business, we have taken additional steps to ensure we are attracting a more diverse talent pool across all our roles, but especially those that are traditionally filled by men. We have developed targeted recruitment events and worked in partnership with professional organisations to attract female talent for some roles. We have also continued to review our role profiles and job advertisements for gender neutrality to ensure we are reaching a diverse range of candidates. Beyond gender: We view diversity in the broadest possible sense inclusive of gender, ethnicity, sexual orientation, background and thinking style. We work with Careerwise to place female internships into STEM based roles in our business.
6/6 Statutory disclosures Diageo Great Britain 2018 2017 % male/female employees 53.3/46.7% 51.1/48.9% Median gender pay gap -12.6% -9.8% Mean gender pay gap -2.1% 4.1% Median bonus pay gap 9.3% 12.3% Mean bonus pay gap 18.8% 23.5% % males/females receiving a bonus payment 85.9/88.4% 86.3/91.8% Upper quartile* (male/female %) 54.1/45.9% 57.3/42.7% Upper middle quartile (male/female %) 47.5/52.5% 44.1/55.9% Lower middle quartile (male/female %) 53.5/46.5% 44.0/56.0% Lower quartile (male/female %) 64.6/35.4% 60.7/39.3% *Quartiles are based on hourly pay rates Diageo Scotland 2018 2017 % male/female employees 67.7/32.3% 68.0/32.0% Median gender pay gap 18.0% 16.7% Mean gender pay gap 10.4% 11.3% Median bonus pay gap 53.7% -263.1% Mean bonus pay gap 30.7% 9.6% % males/females receiving a bonus payment 33.7/58.0% 93.6/94.4% Upper quartile* (male/female %) 79.1/20.9% 78.5/21.5% Upper middle quartile (male/female %) 75.3/24.7% 76.4/23.6% Lower middle quartile (male/female %) 65.1/34.9% 62.1/37.9% Lower quartile (male/female %) 54.0/46.0% 55.0/45.0% *Quartiles are based on hourly pay rates Declaration We confirm the information and data reported is accurate as of the snapshot date 5 April 2018. Ivan Menezes Chief Executive Mairéad Nayager Chief Human Resources Officer
Diageo plc Lakeside Drive Park Royal London NW10 7HQ United Kingdom T: 44 (0) 20 8978 6000 www.diageo.com Registered In England No. 23307 2018 Diageo plc. All rights reserved. All brands mentioned in this document are trademarks and are registered and/or otherwise protected in accordance with applicable law.