Bonuses cancelled at E&Y.
Hundreds of senior managers at Ernst & Young were left ‘furious’ this week following the Big Five firm’s decision to cancel this year’s payout from a profit participation scheme.
With morale already low following the cull of 200 jobs just weeks ago, confidence was dealt another blow after the cancellation of rewards that should have been paid four months ago.
A spokesman from Ernst & Young said: ‘We are not continuing with that scheme. We are due to update the bonus scheme. We try to keep our reward system as competitive as possible in the market.’
The reasons for ditching the scheme are unclear but it is understood that it is not linked to the firm’s ability to meet this year’s targets.
A disgruntled insider said: ‘It’s one thing to fail to make a pay-out if profits don’t reach required levels. It’s something else to say that there is no possibility of a payout even if we do meet the current year budget.’
A revamped scheme is expected to be offered to managers in June 2002.
‘I think E&Y needs to speak to some good accountants for advice on planning and implementing a bonus scheme. You can’t cancel a scheme retrospectively and expect people not to care,’ said the insider.
E&Y had a fee income of #625.6m for the year ending June 2001 and had the second highest growth rate, after Deloitte & Touche, of the Big Five firms.
Ernst & Young axes 200 jobs www.accountancyage.com/Practice/1125712.