Deloitte Cuts Partner Pay As Revenues Rise
Global accounting and consultancy firm Deloitte has scaled back its partner pay by 13 percent despite a 7 percent rise in its revenues to £2.1 billion in the year to May.
Profits to be distributed to partners plummeted to £758,000 on an average compared to £873,000 last year, despite a “successful” 12-month period of trading according to Ian Steele, senior partner for Deloitte in Scotland.
During those 12 months, Deloitte promoted four of its partners and six directors in its public sector and financial services practices.
Deloitte, which is one of the Big Four auditing firms that were subject to a damning report published by the Professional Oversight Board of the Financial Reporting Council last month, saw an increase in its overall sales by 7 percent to £2.1 billion, up from £1.95 billion one year ago.
However, average earnings of the professional services firm for partners’ lucrative pay packages fell to £115,000, owing to several acquisitions it made and a 2,700-person hiring spree, giving its overall headcount to grow by 8 percent that includes a 4 percent increase in partners and 1,200 graduates and school leavers.
Deloitte said the cut also owed to an above-inflation pay rise to almost all staff following a near-freeze in salaries for the past two years.
From £590 million previously, the total profit distributable to partners fell to £535 million, or an average of £758,000 for each partner, down from the previous year’s £873,000.
John Connolly, Deloitte’s outgoing chief executive and one of the best-paid accountants in UK – ended his 12-year term with a £700,000 cut in remuneration, leaving him a £4.4m package.
His successor, David Sproul, on the other hand, earned £2.6 million after having been promoted from Deloitte’s tax division which managed a 5 percent increase to £534 million.
Sproul said: “This is a robust performance in challenging and competitive markets. We have placed a clear focus this year on putting the building blocks in place for the future success of our firm. We are investing heavily in our people, graduates and new partners to broaden and deepen the range of expertise and services we offer our clients.
“We aim to play a key role in the UK’s recovery and contribute to further economic growth by working with our clients to help them grow their businesses.”
Meanwhile, Deloitte’s corporate finance arm posted an 11 percent rise to £395 million, while consulting results rose by £517 million.