Payouts to partners at the big four consulting firms are declining. Annual profit was affected by weaker sales and an increase in the number of partners. Partners at EY, Deloitte and PwC all saw their share of profits fall by around 5%. .
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Payouts to partners at the Big Four consulting firms have declined as demand for professional services has declined and firms have increased the number of partners.
At EY, the global consulting and accountancy firm’s partner payments in the UK have fallen by 5% this year. The average amount UK partners received was £723,000 ($938,000), compared to £761,000 ($987,000) the previous year.
The company said in a press release that the salary reduction reflects an increase in the number of partners during fiscal year 2024. As of June 2024, EY had 903 partners, up from 866 in the same period in 2023, the FT reported.
EY’s revenue growth rate fell to just 3% in FY2024 from 16% in the previous fiscal year. The decline in performance was due to declines in some of EY’s key divisions, with the consulting and strategy business down 4% and transaction volumes down 13%.
Hywel Ball, who is stepping down as EY’s UK Managing Partner, said: “With UK and global deal activity sluggish and business confidence depressed in FY24, we remain focused on long-term growth and profitability. “We have responded to the market to ensure we have the right platform to continue.”
All senior employees at the Big Four consulting firms are privately held companies and can be promoted to partner status, and some are even offered equity ownership in the business. In addition to salary and bonuses, equity partners traditionally receive a portion of annual profits.
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PwC and Deloitte are also seeing their partners pay less this year as growth slows.
PwC’s UK partners earned an average of £862,000 ($1.11 million) this financial year, 5% lower than the same period in 2023. Total revenue growth fell to 9% compared to 16% growth in 2023, PwC reported.
At Deloitte, partner payouts fell 4.5% to around £1 million ($1.3 million), with equity partners taking home pay around £50,000 lower than a year earlier.
The pay cuts come as the big four – Deloitte, EY, KPMG and PwC – seek to balance their operations after the pandemic-era rush into advisory services ends.
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Despite the current growth slowdown, as more companies seek advice from consultants on how to best launch and optimize their operations, many believe that AI will give their businesses the boost they need. I believe it.
