EY’s UK partners received record wages as deals explode
EY’s UK partners received a record average of £ 749,000 this year as the accounting group benefited from a strong rebound in corporate transactions and demand for advice from its consultants.
The Big Four accountant said fee income rose 7.3% to £ 2.75 billion in the 12 months to July 2, with profits rising faster in part due to the drop travel costs during the pandemic.
EY’s 781 partners shared pre-tax profits of £ 533million, up from £ 479million a year earlier. Sales increased in its four main lines of business, resulting in the highest payout per partner since figures began to be released in 2002.
This is the latest round of strong UK results from the Big Four accounting groups. The industry has benefited from a wave of M&A activity as companies reshape and digitize their operations in response to the pandemic.
PwC’s UK partners received a record average of £ 868,000 in the 12 months leading up to June, while booming demand and a one-time windfall from the sale of its restructuring division enabled Deloitte to remit to its partners averaged over £ 1million in the year to May. KPMG, the other Big Four company, is expected to release its results in December.
EY’s nearly 17,000 salaried employees shared a bonus pool of £ 83million, including a one-time payment for their work during the pandemic. Business partners do not receive a salary, but rather share in the profits of the business, with individual payments being influenced by seniority and performance.
Hywel Ball, chairman of EY in the UK, said his company will continue to invest in high-growth sectors such as technology and sustainability consulting after making five acquisitions in the past six months.
He said the firm’s strong financial performance continued into the first three months of its current fiscal year, which began in July, after a correspondingly weak quarter last year. “We are confident that we will have another good year of growth this year,” he said.
However, he added that there was a risk that rising interest rates and cutbacks in the supply chain could cause difficulties for businesses and dampen demand for consultants in the first half of 2022.
The largest increase in revenue was recorded in EY’s strategy and transactions division, which rose 12.1 percent, followed by consulting, where sales rose 9.5 percent.
EY’s tax division increased sales by 4%, while revenue from the insurance business grew 5.8% as rising prices in the audit market outweighed concerns concerning the quality of the firm’s work.
EY is the subject of an investigation by the British regulator into its audits of three collapsed companies: NMC Health, Thomas Cook and London Capital & Finance. He was fined £ 2.2million in August for breaches of his audits of Stagecoach, the London-listed transport company.
It pledged to invest around $ 2 billion globally to improve the quality of its audits after its reputation was tarnished by audits of Germany’s Wirecard and China’s Luckin Coffee, which are at the center of scandals from fraud.
EY’s revenue from the UK government and infrastructure clients grew 18.5% last year, but Ball said his company had focused on work where it could provide information and not had not “gone shopping” with the government by providing a large number of consultants.
The UK government has come under scrutiny for how much it paid consultants during the pandemic. A report by MPs last week criticized the number of consultants used for England’s coronavirus testing and tracing service.
EY’s UK results followed news in September that its global business network had increased total revenue by 4% to $ 40 billion. EY does not disclose its worldwide profits.