EY partners get pay boost as UK revenue soarsby
Partners at EY banked an average share of profit of £749,000 as the Big Four firm saw UK revenue grow by 7.3% for the financial year ended 2 July.
EY has announced strong growth over the last financial year, which it has put down to long-term investments in people and technology as well as client demand.
While a thriving financial outlook across all divisions took the headline position in EY’s financial results, the accounting firm also positioned its focus over the past year on diversity and inclusiveness, sustainability and audit quality as key growth metrics.
Hywel Ball, EY’s UK Chair, said strong balanced growth across the business was driven by high levels of demand from its clients as they’ve had to adapt to the “realities of Covid-19”.
He also attributed the success to the “long-term investments we’ve made in our people and services which has meant we’ve been resilient, agile and able to respond to our stakeholders’ needs.”
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The financial results for the Big Four firm revealed a 7.3% growth in revenue, while UK fee income also moved in the same trajectory to £2.75bn from £2.57bn the previous year. The firm reported that the distributable profits before tax increased to £533m, up from £479m in FY20.
EY said the growth was balanced across all business areas, with strategy and transactions seeing the biggest uptick at 12.1%, followed by consulting at 9.5%, assurance at 5.8% and tax at 4% growth.
Partner pay was also up this year, increasing to £749,000 from £667,000 last year. Although this figure trails the £868,000 average profit per partner that those working at PwC raked in. PwC reported a similar growth as EY in its financial results in August, with the average profit per partner pay dwarfing 2020’s £685,000.
The money trickled down to the rest of the firm beyond partners with £83m in bonuses being paid to EY workers.
EY’s Ball was also keen to stress the steps the firm has taken beyond having a healthy balance sheet.
The firm was keen to point out its climate credentials, such as achieving its global ambition to be carbon negative in October, and the success of its corporate responsibility programme supporting almost 1.3m people in the UK. But the majority of the non-financial metrics centred on the number of new people entering the business and internal promotions.
Over the past year, EY has hired over 2,550 people, with a further 909 graduates and 179 apprentices joining the firm. EY added that a considerable number of these roles are based outside London. It has also appointed 103 new UK equity partners - 65 of whom were internal promotions.
Another focus over the past year has been EY’s commitment to diversity and inclusion. The firm sets out that creating a diverse workforce is a “top priority” at both partner level and across the organisation. This has translated into EY offering at least 30% work experience to black young people over the next five years and targets for black partner representation.
The steps EY is taking now are necessary when the FY21 results show that out of the 781 UK partners only 24% were female, 13% were from an ethnic minority heritage and 1% identifying as black or mixed black heritage.
In a year where EY was at the centre of continuing sanctions like its recent £2.2m fine for audit failings at transport company Stagecoach and the Wirecard scandal in Germany, the financial results couldn’t ignore the audit elephant in the room.
EY notes that it made a US£10bn investment in people, tech and quality management systems, which it said is reflected in the firm’s improvement in the audit quality inspection results.
It admits that there’s “still more to do” and it hopes to achieve this by focusing on “building a culture of challenge and providing independent oversight of the UK audit practice” through an audit quality strategy and establishing a new UK audit board. All eyes are now on the government’s audit reform consultation.
As EY transitions out of the pandemic, Ball is looking at building on the growth of the past year.
The Big Four firm has already set in motion plans to support a different way of working. The firm has set on a hybrid working model and EY’s Ball expects this flexible way of working will “maximise the collaborative benefits of in-person meetings with the flexibility of remote working, for both our clients and people”.
Concluding, Ball said: “The decisions we took during the pandemic to continue investing in our people, business, and the range of services we provide to clients means that we are in a great position to build our UK growth. We have ambitious growth plans and will be further strengthening our capabilities in areas such as ESG reporting, strategy and technology consulting."
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