What is a partner worth?

Gold bars stack
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It is hard to know whether to feel proud or depressed when experts discussing decreasing accountants’ profit shares scoff at the leaders of our profession.

That was the response during the business section of the Today Programme earlier this week when it was reported that partners at PwC had earned a meagre £650,000 per head on average last year, a reduction of £50,000 from 12 months before.

Since we know almost exactly what BBC journalists get paid (or don’t in the case of those earning under £150,000) it is easy enough to attribute their jollity to sour grapes.

In an era when high levels of executive pay are subject to criticism from pretty much anyone who does not get into the relevant salary bracket, accountants might well begin to come under unkind public scrutiny in the very near future. 

In particular, given the media attention that has been directed towards often legitimate tax planning arrangements, let alone the racier ones, some could begin to suggest that members of the profession are profiteering at the expense of the taxpayer, even if the connection is somewhat tenuous.

There has also been the news that following the demise of Bell Pottinger after its ill-fated advertising campaign in South Africa, senior heads have been rolling at KPMG’s offices in that country in connection with its work for the same client.

Coming back to the question at the head of this article, it is almost impossible to compare the value of those involved in different professions. Is a mediocre Premier League footballer really worth five or 10 times as much as a partner in a respectable but not high-flying firm of accountants? What about a comparison between nurses and MPs?

From the point of view of those reading this article, the most likely area of interest is the difference between their own salary/profit share and the £650,000 figure earned by the average partner at PwC.

Many of us are probably happily getting along on somewhere between 10% and 20% of this number but might well wonder why we are not on say one-third of it. Who knows, maybe some of the very bullish might even claim that they are worth two or three times the £650,000 figure.

Alternatively, perhaps this news could be aspirational and either lead to changes in policies within our own practices intended to increase profitability in an effort to ensure that we hit that elusive half million pound target next year or, failing that, start filling in application forms with a view to becoming a partner at PwC in 2018.

About Philip Fisher

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By DJKL
20th Sep 2017 15:13

How things have moved on, I recall that in the very early days of the bigger firms starting to disclose partner earnings, the highest paid, the Messi or Ronaldo of UK accountancy (I think with KPMG) , was earning circa £750k; now the average partners are fast approaching that sort of number.

Maybe two transfer windows for accountants should be introduced.

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