Partners at PwC will receive an average of more than £1m in remuneration for the latest financial year, a record for a Big Four accountancy firm.
PwC made an average profit per partner of £920,000 in the year to the end of June 2022, down from the previous record of £868,000 the previous year and £765,000 in 2019 before the pandemic, according to unaudited figures.
Big accountancy firms have enjoyed a boom in recent years thanks to a flood of corporate mergers and acquisitions since the first wave of coronavirus-related restrictions were eased.
Pay for PwC partners was topped up by an average of £100,000 from the $2.2bn (£1.83bn) sale of a business providing tax advice to companies relocating staff overseas to US private equity firm Clayton, Dubilier & Rice. This meant that the average partner salary for the year broke the £1m barrier.
The 950 members of its senior executive level were informed of the annual payout this week, according to Sky News, which first reported it.
There are some doubts whether the barrage of dealmaking can continue in the coming months as investors adjust to rising interest rates and become less willing to finance riskier takeovers. Yet accountants—and their burgeoning consulting divisions—also expect a continued boom in consulting work on sustainability reporting, which is becoming more common for large enterprises due to regulations and investor pressure.
The record payments have come despite PwC – like its Big Four rivals, Deloitte, EY and KPMG – facing repeated reprimands over standards in its auditing business. Last month, the UK watchdog fined construction firms Galliford Try and Kier £5m for audit failures. PwC also faces investigations by the UK’s Financial Reporting Council into outsourcer Babcock, liquidated Wyelands Bank, collapsed investment firm London Capital and Finance and Eddie Stobart Logistics. Perceived conflicts of interest between audit and consulting work were so problematic that in May EY said it was drawing up plans to spin off its audit division.
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Kevin Ellis, PwC’s UK chairman and senior partner, said in a statement that earnings per partner will decline next year as the firm invests to protect its position.
“Our business is in a strong position thanks to the breadth of our services and clients, the skills of our people and the investments we have made,” he said. “It’s been an exceptional year, but we can’t take it for granted.
“With the economic difficulties facing all businesses, including rising costs and a tightening labor market, we need to support ourselves with further investment, particularly in people, skills and technology.
“These investments are likely to reduce our earnings per partner next year, but given the expected boost to financial results over the medium to long term, it is right to make these investments now.”
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