Big Four's big pay discrepancy
Self-referential and slightly off topic this may be, but it’s a question worth asking.
Are Big Four staff at all cheesed off that their pay has gone up by only a fraction of that of their bosses this year? Damian Wild, Accountancy Age’s editor-in-chief, looks at the numbers in his column in the magazine this week. Damian’s point is slightly different, but it’s worth asking this question too.
E&Y’s profit per partner went up by 27% in the last financial year. KPMG profits per partner were up 14%. The same figures for Deloitte and PwC were 8% and an incredible 42% respectively.
So now to the employees, the ‘people’ of which the firms speak so highly and bang on about needing to find and retain.
Average staff remuneration was up 6% at E&Y, 1% at KPMG (with £80m of bonuses chucked in too, I think), 5% at Deloitte and 2.2% at PwC. Considerably smaller increases, suggesting that the bumper, some might say, excess profits of the Sarbox/IFRS era, have generally gone to the 2,000 or so partners who run the nation’s major accountancy firms. Perhaps I’ve got these numbers wrong and someone more versed in Big Four accounts can correct me.
Of course, the normal arguments apply. Partners take the risk (though how great those risks are may be open to debate), so they get the reward. Likewise, Big Four staff aren’t exactly on the bottom rung of the opportunity and earnings ladder.
But it’s worth bearing the numbers in mind, at least, when the Big Four talk about their ‘people’ agendas. Just exactly which people do they mean, you may wonder?