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Payouts for UK partners at EY were trimmed to an average of £761,000 in the accountancy firm’s most recent financial year as a result of rising costs and the partnership increasing in size.
Revenues in the UK rose 16 per cent to £3.76bn in the 12 months to June, despite a tumultuous year during which EY tried to break up its audit and consulting operations globally before abandoning the plan after a revolt by some US partners.
Total profits rose more slowly than revenues, increasing by 3.9 per cent to £659mn.
UK chair Hywel Ball said the fall in average profit per partner from £803,000 to £761,000 was primarily because of an increase of about 10 per cent in the number of equity partners sharing the profits.
EY’s partners remain the third-best paid of the Big Four firms in the UK, where their Deloitte counterparts shared average payouts of £1.06mn this year while PwC’s leaders earned £906,000.
KPMG, which is yet to report results for its most recent financial year, paid its partners an average of £717,000 in the year ending in September 2022.
EY has 932 equity partners in the UK, up almost a fifth since 2021, which Ball said was a contrast with rival firms, whose partner numbers had been “broadly flat” in recent years.
KPMG’s equity partnership has shrunk to its smallest in two decades, leaving profits to be shared by a more select pool.
Ball, whose tenure has been extended beyond the firm’s usual retirement age of 60, said the results also reflected longer-term investments by EY, including acquiring eight businesses since 2021 as part of efforts to bulk up its technology consulting business.
EY increased its total number of UK partners and staff from slightly less than 19,000 to 21,100 in the 12 months to June, with hiring outweighing redundancy programmes in parts of its business. These included removing about 150 of its financial services consultants.
Partners were told to prepare for cost-cutting after the collapse in April of the break-up plan. This resulted in UK-specific costs of £10mn in addition to bills of $600mn globally, including $300mn of internal costs for work done by EY’s own staff.
EY’s rank-and-file employees shared a bonus pool of £83mn, down from £110mn a year earlier as tougher economic conditions and a slump in dealmaking subdued demand for some services from accountants and consultants.
The firm said it had spent £72mn on salary increases, compared with £106mn a year earlier when it gave large payouts in the face of rising inflation and spiralling energy prices after Russia’s invasion of Ukraine.
EY’s tax and legal division reported a 20 per cent increase in revenues, which Ball said reflected increased demand in multiple areas, including companies outsourcing parts of their tax functions and seeking advice on changes in how international companies’ profits are taxed.
Revenues in the consulting division increased by 18 per cent, while audit and assurance rose 17 per cent, and the strategy and transactions department grew by 8 per cent.
