94 BAE Systems Annual Report 2017 Remuneration Committee report continued Wider employee agenda Concluding comments Recognising the public interest in pay On behalf of my colleagues on the Committee, differentials, and the expected proposed and indeed the entire Board, we appreciate legislation in this area, we are continuing the input we have received from shareholders to voluntarily disclose the pay ratio of our and representatives of institutional investors. Chief Executive to that of the average The Committee remains committed to our employee of the Group. policy of paying for performance. The The level of salary adjustment for the changes for 2018 simplify the LTI construct executive directors is in line with the considerably whilst ensuring that the average increase for employees generally incentive arrangements for executives remain across the Group in 2018. meaningful and are aligned to the Company’s strategic goals and the interests of our To support the Committee in taking a shareholders. The Remuneration Committee greater responsibility for demonstrating is actively engaged in monitoring performance how pay and incentives are aligned across and continuing to ensure that the level of the Company, the Committee undertook challenge within our annual and long-term a reward framework deep-dive session incentive plans remains appropriate. covering information on the structure of remuneration across the Group, including On behalf of the Board pension benefits. In February 2018, BAE Systems published Paula Rosput Reynolds its gender pay report in accordance with Chairman of the Remuneration Committee UK legislation. Our average gender pay gap is 11.2%. This is lower than the UK national average of 18.1%. We have a gender pay gap because we employ around four times more men than women in the UK and a greater proportion of our senior leadership team is male. We are determined to bridge the gender gap in our industry by encouraging more women to join BAE Systems and we have put in place a number of programmes and initiatives to support the development and progression of women into senior executive positions.