Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Payouts for EY’s UK partners declined by 5 percent this year to an average of £723,000, as the Big Four firm faced a significant slowdown in sales growth and an increase in partnership size.
The decrease in partner pay for the most recent financial year followed an increase in the number of equity partners who share in the firm’s profits, EY stated on Friday. The average equity partner headcount was 903 in the year ending June, up from 866 in 2023.
Revenue growth at the firm slowed to just 3 percent during the year, a sharp decline from the 16 percent growth recorded in the previous 12 months. Total profits fell 1 percent to £653 million, with fee income of £3.7 billion.
The slowdown was driven by contractions in two of EY’s main business units — consulting and strategy and transactions — where sales decreased by 4 percent and 13 percent respectively, due to a more challenging economic environment.
“In a year of economic and geopolitical uncertainty, we’ve achieved a strong performance and continued to invest in the business [and] our people,” said Hywel Ball, EY’s outgoing UK managing partner.
“Given the reduced UK and global deal activity and low levels of corporate confidence during [the year], we have responded to the market to ensure we have the right platform for continued long-term growth and profitability,” he added.
Assurance, which includes EY’s audit business, was the firm’s best-performing service line during the year, with revenues increasing by 10 percent. Sales in its tax business also saw a 4 percent rise.
EY’s UK performance for its latest financial year was in line with competitors PwC and Deloitte, who also reported a slowdown in sales growth due to weaker demand for consulting and deal advisory services.
EY’s partners are currently the third-highest paid among the Big Four firms in the UK this year, with Deloitte partners earning an average of £1.01 million and PwC’s top earners receiving £862,000 for the firm’s most recent financial year.
KPMG, which has yet to report results for its latest financial year, paid its equity partners an average of £746,000 in the 12 months ending September 2023.
Ball, who has led the UK firm since 2020, strongly supported EY’s failed attempt to globally split its accounting and consulting divisions. He is stepping down and will be succeeded by financial services leader Anna Anthony in January.
Anthony stated: “We have had a solid start to the first quarter of our new financial year, with an improving deals market benefiting our strategy and transactions business in particular. We anticipate this momentum will continue to grow throughout the year.”