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Gender Pay Gap report 2020 Introduction

I am pleased to present our 2020 Report.

FirstGroup plc is a leading transport operator in the UK and North America. We provide easy and convenient mobility, improving quality of life by connecting people and communities. To understand the needs of our customers, and deliver the best possible service, our workforce must reflect the diversity of the communities we serve.

We are committed to making our inclusive for all our employees, regardless of their gender or any other characteristic. We recognise women have traditionally been under-represented in the UK passenger transport sector, but I am very pleased that, since 2017, FirstGroup has more than doubled the number of women we employ in the UK with significantly more women hired in 2019/20 than the previous year. Our two women’s development programmes have continued to deliver results, with a sizeable number of attendees going on to achieve promotion.

I am particularly pleased that since our last report, we have appointed women to lead two of our largest UK businesses – Janette Bell as Managing Director of First Bus, and Claire Mann as Managing Director of South Western Railway and appointed Helen Wylde to the Managing Director role for the newly created East Coast Trains Ltd. These latter two appointments mean that of our six train operating companies, three will be led by women.

Since our last report, we also welcomed 3,400 new employees to the Group as we commenced operation of the rail franchise. This has had an impact on our aggregated gender pay gap, and the full details are set out in this report.

In our first Gender Pay Gap Report in 2017 we set out four actions to increase our gender diversity: • Increase the number of female applicants for all roles; • Encourage more women to stay and progress, through policies which make it easier to combine a with family life; • Support and develop more women to move into higher paying roles; • Ensure men are more aware and equipped to play their part in creating an inclusive which is welcoming to women.

This report provides an update on our continued progress against each of these commitments.

I can confirm our absolute determination to ensure fairness in pay and progression regardless of gender, and to close gender pay gaps where they do exist in some of our individual businesses. There is, of course, still much more to do, but I am proud of our efforts so far, and I am personally committed to driving further progress against the four actions set out above.

Matthew Gregory Chief Executive

2 Gender Pay Gap report 2020 Our headline figures

35% of women participating Our median in our Step Forward gender pay gap is programme for junior 4.4% managers have been This means women’s promoted since median hourly pay is 4.4% lower than men’s. This attending. compares to the national average of 15.5%. 73% The number of our reporting of UK employees companies have a covered by our report at gender pay gap below 5 April 2020 is 31,061. This the UK national comprises 25,158 men and average of 15.5%. 5,903 women. As the majority of women are in the middle two pay quartiles, our We hired median hourly pay for women is slightly lower than that for more men. 29% women in 2019/20 and have more than Three of doubled the number of our six train women we employ companies are since 2017. now led by women.

Gender Pay Gap report 2020 3 Understanding our gender pay gap

The gender pay gap shows the difference between the average hourly rate of pay of all men and all women in the organisation as a percentage of the average hourly rate of pay of men. This is different from ‘equal pay’ which considers whether men and women receive the same pay for work of equal value.

Aggregated results for FirstGroup businesses in the UK

Mean and Median pay and bonus gap

MEAN MEDIAN

YEAR 2017 2018 2019 2020 2017 2018 2019 2020

Gender Pay Gap -2.2% 3.1% 3.4% 9.0% -9.1% -5.1% -11.6% 4.4%

Gender Bonus Gap -33.2% -22.2% -17.6% -2.5% -97.6% -33.3% -33.3% -81.2%

80 Proportion of employees receiving a bonus Female Male 60 YEAR 2017 2018 2019 2020 % 40 Female 37.6% 54.6% 74.6% 65.3% 20

Male 34.0% 47.3% 59.1% 77.1% 0 2017 2018 201 2020

Proportion of employees in each pay quartile band

MALE FEMALE

YEAR 2017 2018 2019 2020 2017 2018 2019 2020

Upper 86.1% 88.5% 87.5% 88.4% 13.9% 11.5% 12.5% 11.6%

Upper middle 82.5% 80.1% 75.1% 73.4% 17.5% 19.9% 24.9% 26.6%

Lower middle 91.5% 88.0% 90.3% 68.2% 8.5% 12.0% 9.7% 31.8%

Lower 89.0% 87.5% 88.7% 86.5% 11.0% 12.5% 11.3% 13.5%

Number of employees* 35,000 Female Male YEAR 2017 2018 2019 2020 28,000

FEMALE 2,937 3,994 4,081 5,903 21,000

MALE 20,062 24,074 23,591 25,158 14,000

% 12.8% 14.2% 14.7% 19.0% 7,000

TOTAL 22,999 28,068 27,672 31,061 0 2017 2018 201 2020 * Entities with more than 250 employees

4 Gender Pay Gap report 2020 Understanding our gender pay gap

Our 2020 results Increasing female representation in our workforce On 5 April 2020, FirstGroup employed more than 31,000 employees1 in the UK across 31 The UK transport industry has traditionally companies. Of these, 22 companies had 250 or attracted more men than women; according to data more employees and are required to publish their from the Office for National Statistics, only 22% of gender pay gap data (shown on page 8). transport workers are women.3

In previous years, FirstGroup’s overall gender Since we first started our gender pay gap reporting pay gap showed that women’s median hourly rate in 2017, we have more than doubled the number was higher than that for men. This was because of women we employ. However, we recognise although the number of women we employed women remain under-represented in our higher- was relatively low, they tended to be concentrated paid and technical professional roles in the higher pay quartiles. Since 2017, the in engineering and operational . The proportion of women we employ has been steadily number of women in these roles continues to be increasing, both through our efforts affected by the low proportion of women studying and the mobilisation of new rail businesses. STEM subjects (science, technology, engineering and maths) at school and university, which are This year, our overall UK result shows that women’s required in many of our higher-paid . median hourly pay is lower than men’s, and the median gender pay gap has changed from -11.6% Most of our frontline employees are men, and to 4.4%. This change has been driven primarily by because historically many of our managers have the start-up of our new rail franchise, Avanti West been promoted from these operational and Coast. Avanti’s workforce is 40% female, which is technical roles, this also contributes to the under- higher than the industry average. This has led to a representation of women in management positions. significant increase in the proportion of women in the lower middle pay quartile, which results in the median hourly rate for women being lower than that for men. However, because a significant proportion of women at Avanti are in roles that are eligible for a bonus, their inclusion has also led to a change in the gender bonus gap, with women’s median bonus being 81.2% higher than that for men.

Of our 22 operating companies required to report, 16 of them (73%) had a median gender pay gap below the national average of 15.5%2; four either had a gender pay gap of zero or women’s average pay was higher than that for men. We are pleased that 11 of the operating companies have improved their median gender pay gap since last year.

1 A total of 7,113 employees in the Bus operating companies were on as at the snapshot date and were therefore excluded from the median and mean pay calculations in accordance with guidance issued by the UK Government Equalities Office. 2 Office for National Statistics, Median Gender pay gap in the UK 3 November 2020 3 Office for National Statistics, Transportation and storage sector data as at September 2020

Gender Pay Gap report 2020 5 Actions to address the gender pay gap

Despite the impact of the COVID-19 pandemic on our businesses during 2020, we have made further progress on the four commitments we set out in 2017.

Increase the number of female Encouraging more women to stay 1 applicants for all roles 2 and progress, through employment policies that make it easier to combine Our UK businesses have increased their usage of a career with family life social media to reach women who might not have considered a role within the bus or rail industry, We have been trialling part-time working for bus and all have continued to review and update their drivers in , to enable both recruitment material to include more images and women and men with caring responsibilities to case studies featuring women. better balance work and family life. This builds on our 2019 pilot in (our largest By using improved gender-focused advertising bus company) of more flexible shift arrangements material, we encouraged 2,450 more women to which improved driver retention and helped boost consider a career in the transportation sector, our numbers of women drivers. The results of increasing our female applications by 14% the First West of England trial are currently being compared to the previous year. We have also evaluated, and we will continue to work with our increased the proportion of female hires by 12% trade union partners to explore how we could offer in 2019/2020 and the absolute number of females more flexible shift patterns. hired by 29%.

The proportion of female apprentices recruited in First Bus in 2019/2020 has increased by 40% compared to the previous year. This was achieved through recruitment campaigns designed to better appeal to women, using videos of our existing female apprentices and featuring other successful female employees on our site, as well as targeted social media campaigns.

6 Gender Pay Gap report 2020 Actions to address the gender pay gap

Support and develop women to Ensure men are more aware and 3 move into higher paying roles 4 equipped to play their part in creating an inclusive workplace that is Despite the disruption of the COVID-19 pandemic, welcoming to women we remained committed to delivering our women’s development programmes, which were conducted All of our divisions have policies in place that aim to on line during 2020. eliminate any form of discrimination or inappropriate behaviour, but we recognise there is still more to do. Our Step Up programme, designed for women We continue to ensure that our leadership are seeking their first supervisory position, continues reinforcing appropriate standards throughout their to help us accelerate the number of women moving organisations. into management. Since its launch in 2019, more than 160 women will have attended the programme First Bus and our larger rail businesses utilise by the end of March 2021, and 28% have already unconscious bias to make managers more been promoted into higher-paying roles. aware of, and therefore better able to overcome, any discrimination within the workplace. Following Our Step Forward programme designed for women completion of this training for the First Bus Executive in junior managerial roles to prepare for middle and senior and middle managers in 2019, further management jobs has been equally successful. rollout to all First Bus line managers has been partially The delivery of the first programme was completed disrupted whilst employees and managers have been in October 2020 with 35% of participants having dealing with the immediate response to the pandemic, been promoted since attending. but will be completed as soon as we are able to.

“Before the Step Up programme I wouldn’t have “ even thought about applying for a team leader role but now I’ve attended this course I want to succeed and aim high, taking every opportunity that comes my way.” Step Up participant, 2020

“This is the most valuable Looking forward

course I have attended; I’ve During 2021 we will continue to drive further

found it really helpful, and it has action against all four commitments, and in doing certainly played a part in my so, play our part in addressing the longstanding recent promotion.” “ underrepresentation of women in the passenger Step Forward participant, 2020 transport industry.

Gender Pay Gap report 2020 7 7.3% 1.4% 2.8% 11.1% 12.1% 41.7% 11.3% 51.5% 15.7% 12.5% 15.4% Female 16.4% 10.5% 21.2% 62.7% 10.8% 10.9% 16.3% 10.2% 24.2% 34.2% 43.2% % in Lower Quartile Male 89.1% 87.5% 37.3% 87.9% 97.2% 92.7% 75.8% 83.7% 88.7% 89.5% 78.8% 89.8% 48.5% 84.3% 84.6% 83.6% 58.3% 56.8% 98.6% 65.8% 89.2% 88.9% 9.1% 7.4% 7.3% 5.5% 5.6% 0.0% 5.0% 8.8% 8.0% 6.9% 3.9% 23.1% 11.0% 21.6% 15.4% Female 14.3% 13.6% 10.9% 55.7% 52.8% 32.9% 50.0% Male 67.1% 89.1% 93.1% 47.2% 96.1% 91.2% 92.7% 78.4% 94.4% 85.7% 92.6% 76.9% 92.0% 86.4% 94.5% 89.0% 50.0% 84.6% 44.3% 95.0% 90.9% 100.0% % in Lower Middle Quartile Middle Lower in % 4.1% 7.7% 7.7% 7.0% 8.7% 6.4% 2.8% 2.9% 5.5% 5.6% 6.6% 8.9% 12.1% 15.1% 17.5% 61.8% Female 10.5% 32.4% 10.9% 16.6% 13.9% 25.8%

Male 97.1% 91.1% 89.1% 86.1% 67.6% 87.9% 97.2% 91.3% 74.2% 94.4% 82.5% 93.4% 83.4% 89.5% 92.3% 92.3% 94.5% 93.6% 93.0% 95.9% 84.9% 38.2% % in Upper Middle Quartile Middle Upper in % 7.1% 9.1% 9.1% 7.7% 7.0% 7.2% 1.8% 4.5% 2.0% 9.3% 5.3% 5.9% 6.3% 3.9% 5.9% 6.2% 12.1% 11.4% Female 21.9% 15.5% 18.0% 33.8% first-group % in Quartile Top Male 78.1% 94.1% 94.1% 96.1% 87.9% 94.7% 93.7% 90.7% 92.8% 92.3% 82.0% 92.9% 84.5% 95.5% 93.0% 93.8% 88.6% 98.0% 90.9% 90.9% 98.2% 66.2% 6.5% 6.5% 3.6% 0.0% 5.9% 37.4% 37.5% 87.0% 21.6% Female 24.7% 72.7% 82.4% 13.3% 16.2% 40.5% 23.9% 44.6% 45.3% 44.3% 98.3% 96.6% 93.9% Male % receiving a Bonus 1.0% 9.4% 9.2% 5.2% 74.1% 94.1% 37.5% 14.6% 12.8% 52.7% 15.0% 26.7% 86.7% 25.6% 98.4% 49.3% 40.0% 53.6% 94.9% 84.0% 43.9% 38.2% @firstgroupplc @firstgroupplc www.firstgroupplc.com [email protected] -2.6% Median +0.0% +0.0% +0.0% +0.0% +0.0% +0.0% +0.0% -23.5% -25.0% +18.4% +72.6% +75.0% +25.0% +50.0% +40.6% +60.0% +33.3% +33.3% -196.5% -333.3% +100.0% Mean -1.3% +9.5% +4.7% +0.6% +3.9% -47.7% +22.1% -43.3% +21.5% +79.8% +28.8% +90.7% +82.5% +55.4% +62.6% +39.6% +54.0% +63.5% +38.8% +36.8% +38.2% +100.0% % difference in Bonus Pay -1.0% +1.1% -8.4% -0.0% -0.0% +0.1% +0.1% +0.1% +7.2% +2.7% Median +2.5% +2.0% +0.4% +9.9% +6.0% +12.4% +39.1% +15.6% +24.4% +20.9% +33.4% +45.8% Mean +4.1% +1.8% +1.9% +2.5% +0.7% +0.4% +5.4% +4.4% +0.5% +4.8% +6.8% +6.0% +3.9% -26.2% +12.7% +22.1% +14.3% +15.3% +21.7% +31.2% +22.9% +42.0% % difference in Hourly Rates

Company / Entity with more than Employees 250 First City Line Ltd Buses Ltd Buses Ltd Buses Ltd (No.1) Ltd First Glasgow (No.2) Ltd First Hampshire & Dorset Ltd First Manchester Ltd Ltd Ltd Ltd Ltd First West of England Ltd First West Yorkshire Ltd Ltd Bluebird Midland Bus Central Services Ltd FirstGroup Holdings Ltd Great Western Railway Ltd Ltd Express TransPennine First MTR South Western Trains Ltd First Trenitalia West Coast Rail Ltd Ltd Note + means men have higher pay/bonus than women. - means women have higher pay/bonus than men. Our gender data gap: pay as at 5 April 2020 UK entities 2019/20

8 Gender Pay Gap report 2020