EY Partners Experience £38,000 Salary Reduction

Partners at EY in the UK faced an average salary reduction of £38,000 last year, attributed to a decline in fees from international transactions.

The average distributable profit per partner decreased from £761,000 to £723,000.

As one of the leading firms among the Big Four in professional services, EY explained that the drop in earnings was primarily due to an increase in the number of equity partners, rising from 866 to 903.

For the financial year ending in June, fee income remained stagnant at £3.7 billion, while net revenues, excluding fees gathered from other members of the EY global network, grew by 3%. Distributable profits before tax fell to £653 million, down from £659 million the previous year.

The firm’s strategy and transactions sector reported a revenue decline of 13% during the year, attributed to “depressed UK and global deal activity,” as stated by EY.

This pay reduction positions EY as the least financially rewarding among the Big Four firms. In contrast, Deloitte reported partner earnings of £1.01 million in its latest financial year, while PwC’s partners earned £862,000. KPMG’s partners received £786,000 for the year ending on September 30, with their latest figures pending release.

The Assurance unit, which encompasses audit, forensic accounting, and sustainability services like environmental reporting, was EY’s top-performing division, achieving a 10% revenue increase. EY secured the audit for Aviva and oversees the accounts of 24 companies within the FTSE 100 and 55 within the FTSE 250.

Revenue from tax consulting rose by 3%, whereas the consulting services sector, which provides guidance on IT projects, experienced a 4% decrease in revenue.

Chairman Hywel Ball remarked on the challenges faced during the year, stating: “Amid economic and geopolitical uncertainty, we have delivered a strong performance while continuing to invest in our business, our workforce, and the communities we serve.”

Ball’s salary was £3.6 million in the previous year, with his compensation for the current year set to be disclosed in upcoming statutory accounts.

Throughout the year, EY incurred a £4.4 million fine related to its audit of London Capital and Finance, a mini-bonds company that collapsed in 2019 after taking funds from 12,000 clients. Additionally, the firm faced penalties and costs totalling £251,000 for exceeding the fee cap for audit clients, performing twice as much consulting work for Evraz, the steel producer, than permissible.

EY, previously known as Ernst & Young, employs around 20,000 individuals in the UK across 22 offices. Although fee income growth stagnated in the latest year, the firm reported a compound annual growth rate of 10% over the preceding four years.