The average salary for EY partners in the UK hit a record £803,000 after a surge in demand for Big Four firm consultants fueled a surge in full-year profits.
The strong performance comes as EY partners around the world prepare to vote on a proposed spin-off of its audit and consultancy business, which bosses hope will result in faster growth.
The UK arm of the accountancy firm reported on Tuesday a 17% rise in sales to £3.2bn for the year to June, driven by a 33% increase in the consultancy division, whose sales rose reached £888 million.
Profits in the consultancy sector have soared as big companies seek advice on revamping their technology, with businesses moving online and to the cloud.
Distributable profits rose to £634 million from £533 million a year earlier, resulting in an average pre-tax payment to partners of £803,000 from £749,000.
Hywel Ball, UK chairman and senior partner in the 18,900-person firm, said partner pay grew more slowly than overall profits as EY reinvested more of its surplus into its business compared to his rivals.
Ball pointed to the addition of 200 employees to EY through the acquisition of five technology consulting firms last year. The firm also increased the number of partners from 781 to 854, even as rival KPMG’s partnership became the smallest in at least two decades.
The company is the third of the Big Four to report UK results for the most recent financial year. Partners Deloitte and PwC received an average share of the profits of over £1million, although PwC’s figures were boosted by the sale of part of its business. KPMG has yet to release its latest annual results.
Alongside the results, EY announced graduate pay would rise by 13 per cent to an average of £32,000, while school leavers joining as apprentices would get an 11 per cent rise to £22,000. £.
The pay rises, which will help the roughly 1,500 people who joined EY outside of schools and universities last year, follow at least a decade of near-stagnant wages for entry-level accountants.
Ball said the pay increases recognize that younger employees have been disproportionately affected by the rising cost of living.
The employee bonus pot has been increased by more than half to £110m, while the company expects pay rises to cost it £106m in the financial year. Classes.
There had been a “slight slowdown” in demand as the economic outlook darkened, Ball said. But customers still need advice during downturns, when they tend to “change the types of services they seek”, he added.
Outside of its advisory business, EY’s tax service increased revenue by 15% to £934m, while strong deal flow helped boost strategy and deals division sales by 10 % to £590m.
The audit and assurance business increased revenue by 11% to £817m. Audit fees have risen as the Big Four react to increased regulatory scrutiny of their work, although Ball said the increase in revenue was partly due to the addition of new clients such as the manager of Heritage Brewin Dolphin, Estate Agent Countrywide and Construction Group Morgan Sindall.
Ball said no date had yet been set for UK partners to vote on whether to support plans to split its global audit and consultancy operations. Voting was due to begin in November and continue until early next year.