The Big Four and the magic circle law firms account for 13% of million-pound pay packages in the UK
A new report, published today by the think tank High Pay Centre, estimates around 270 partners across the Big Four are earning over £1m per year, while average earnings for all partners exceeds £700,000.
The UK senior partners at PwC, Deloitte and KPMG were paid £3.6m, £2.7m and £2.4m respectively last year. EY has not disclosed its partners pay details.
Average profit share per partner in 2013 was well over £700,000, twice as much as the firms’ nearest rivals, the report said. Profit distribution in the Big Four has not, unlike in the magic circle law firms, breached £1m.
The report describes the information provided on remuneration as “thin and patchy”, with LLPs remaining more opaque than their FTSE counterparts.
The think tank, which campaigns against pay inequality in the UK, said that while pay for bankers and corporate executives have been condemned in the wake of the crisis, lawyers and accountants have largely “escaped criticism”.
High Pay Centre director Deborah Hargreaves argued that the nature of revenue and the relative scarcity of movement between firms means the normal defences of high pay “do not apply”.
She said, “The Big Four and the Magic Circle have very steady incomes so it’s unlikely these vast pay packages are necessary to incentivise staff and increase profits. There is also little evidence of individuals moving between firms, so they are not necessary to attract or retain key employees.
“Our findings show that it’s not just the usual suspects of bankers and chief executives - excessive top pay has infected other leading professions too.”
The report draws attention to the prevalence of Big Four representatives alumni in corporate and regulatory roles. It found 58 FTSE 100 finance directors are qualified chartered accountants, with 46 having previously worked for the Big Four and five of 15 FRC members are former Big Four partners.
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