Hundreds of UK-based PricewaterhouseCoopers (PwC) executives will receive six-figure one-time gains from the sale of the global accounting giant’s mobility services division.
Sky News has learned the company’s 950 partners in the UK are each getting an average of just over £100,000 after a $2.2billion deal with private equity firm Clayton Dubilier & Rice that closed in April will.
According to insiders, the partners were informed of the £100m payout earlier this month by Kevin Ellis, PwC’s UK chairman.
The release comes just weeks before PwC, the UK’s largest accounting firm, announces its results for the year ended June 30, with expectations of another pay round for partners.
The unique windfall also comes amid mounting demands from government ministers that private sector bosses exercise wage moderation or risk fueling rampant inflation seen in much of the global economy.
Simon Clarke, chief secretary of the Treasury, said this week that big pay rises could “prolong and amplify this inflation problem”.
Proceeds from the global mobility deal, which will be distributed to PwC’s UK partners, will total around £100m, according to an insider, with the same amount earmarked for investment in the company’s growth and technology priorities.
In a statement on Saturday, Mr Ellis said: “As with any partnership, there must always be a balance between investing to underpin future growth and paying a dividend to the partners as owners of the business.
“Half of the proceeds will be invested in growth opportunities associated with our people, our technology and our strategic programs, including our ‘Next Generation Audit’ approach to strengthen our partnership for the future.”
The payouts to partners also come as EY, another Big Four audit firm, prepares to announce a landmark proposal to separate audit and advisory businesses.
That deal, which is subject to partner approvals around the world, is expected to be unveiled next month.
PwC, Deloitte and KPMG have all insisted that their existing business models remain intact.
The £200m share of the proceeds from the mobility sale presented to the UK will be replicated in varying amounts with awards to other companies in PwC’s global network.
Last year, following a spike in demand for its services during the pandemic, PwC announced record profits, with partners at PwC receiving an average of £868,000 – including a sum of £50,000 related to divestments.
Industry observers have pointed out that despite rising partner salaries at the Big Four accountants, they continue to be dwarfed by those at ‘Magic Circle’ firms such as Allen & Overy and Clifford Chance.
PwC has not made any layoffs as a result of the pandemic and has not received any government money as part of the furlough scheme. The company employs around 24,000 people in the UK.
PwC has won dozens of public sector contracts to help Whitehall deal with the economic chaos caused by the pandemic, including from the Cabinet Office, Treasury and Department for Digital, Culture, Media and Sport.
Like other Big Four firms, PwC has started charging audit clients higher fees over the past two years as regulatory reforms began to take hold.
A new audit oversight body – the Audit, Reporting and Governance Authority – will replace the Financial Reporting Council (FRC) in the coming years, according to a report by former Treasury Secretary Sir John Kingman.
The FRC has begun to place stricter restrictions on the advisory work that the big four firms can provide to audit clients.
The shock comes after a series of accounting scandals, such as those at BHS – an audit client of PwC – and Carillion.
The Big Four have been collectively fined tens of millions of pounds for audit failures in recent years, with PwC criticizing its work at the likes of BHS and Redcentric.
This month PwC was fined a total of £5m for failing to work on the audits of Kier Group and Galliford Try, two listed construction companies.
PwC UK partnership kicks off six-figure windfall in $2.2 billion mobility sale | UK News
Source link PwC UK partnership kicks off six-figure windfall in $2.2 billion mobility sale | UK News