Deloitte UK partners enjoy biggest payout in decade: £832,000 average
Deloitte UK’s more than 700 equity partners are set to receive a bumper pay-out in 2018, following a boost to the firm’s profits. Despite turbulent economic conditions in Britain, Deloitte’s bullish performance means Partners will pocket an average of over £800,000 each.
Big Four professional services firm Deloitte has been consistently working to bolster its size and revenue both internationally and in the UK over 2018. A hiring spree in Britain, including the pushing of Deloitte’s Cardiff office beyond the 1,000 employee boundary, buoyed billable hours for the firm, while across the world, Deloitte announced it would sink a substantial £430 million into its cybersecurity line to tap into booming demand in the sector.
This has reportedly paid dividends to Deloitte’s UK and Swiss operations in particular, which are run as one entity. The company logged a 5.9% rise in revenue from £3.38 billion to £3.58 billion for the year, including £3 billion in revenue for the UK alone, up 5.1% from a year earlier. The professional services firm’s audit and risk advisory revenues saw the most rapid of this growth, up 10.2% to £1 billion, while its tax services revenue was boosted by 5.8% to £732 million. Consulting maintained slow yet steady growth of only 1.7% to £873 million, while financial advisory services remained more or less flat at £459 million.
As a result, Partners at Deloitte are in line for a bumper pay-out in 2018, after the audit and advisory giant logged higher profits in the UK, despite an economic slowdown and “continued uncertainty”. After the deduction of corporation tax, distributable profit for the year leading to May 31st 2018 stood at £584 million. Deloitte said this marked a 0.5% rise compared to a year earlier, and leaves Deloitte’s 702 equity partners set to receive an average of £832,000 each. The figure is technically lower than the £865,000 logged last year, however this does not take into account how Deloitte has switched to reporting average profit on a post-tax rather than pre-tax basis. When that is factored in, Partners are set for their biggest pay-out in nine years.
Commenting on the positive results, David Sproul, Chief Executive of Deloitte North West Europe, said, “This is a good result in a market facing slower economic growth and continued uncertainty. Tax revenues have been boosted by demand for M&A, private client and employment-related services work, as well as demand for digital solutions to global compliance obligations, where we are continuing to invest. Following the launch of our UK legal services, we are also growing our offering in immigration, employment services, corporate dispute and resolutions, alongside a focus on ‘new law’ services.”
Auditing versus Consulting
At the same time, alongside its Big Four peers, Deloitte is still facing the threat of an industry wide break-up, relating to the Big Four’s perceived dominance of the UK auditing scene. The Big Four’s alleged strangle-hold on the UK’s auditing market has been the source of a sustained debate in recent months. EY, KPMG, Deloitte and PwC currently audit 99 of the FTSE 100, while the quartet of the world’s largest accounting and consulting firms grew their portion of FTSE 350 auditing from 95% to 98% over the past five years. Critics cited concerns that the Big Four’s growing consulting arms make for conflicts of interest in their auditing duties, and could lead to a situation similar to that which caused the collapse of US energy giant Enron at the turn of the century.
Relating continued inquiries of the auditing market to Deloitte’s broader results, Sproul added, “The audit profession has faced significant scrutiny in the past year, with concerns raised over quality, conflicts of interest and a lack of choice. These are serious concerns and we recognise the need for change. We must look at how the audits of the future match the evolving needs of stakeholders and society and address increasing business complexity.”
