270 Big Four partners earn more than £1m

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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.

Ellie Clayton

 

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  • Comment by Anonymous

    Pay the junior staff really well? Either you've never worked in a Big 4 or you've clearly forgotten. To compound the misery, they removed overtime just over a decade ago, which gave the partners the opportunity to bring deadlines forward without paying for it. No wonder their salaries are so high - I guess it allows them to become members at their local golf club.

  • Comment by Anonymous

    Partners earn profits not pay. Have we become so socialist that we are now going to meddle on how much dividends a company can pay its shareholders? Also, as a senior manager in a big four working hard to try and make partner, I really don't think 700k is exaggerated! I very much hope to peak closer to the senior partner figures!

  • Comment by Anonymous

    Ludicrous conclusions from an author suffering from naivete, general ignorance and, I shouldn't be surprised, a partisan agenda. No mention here of the years of study, training, working through the ranks, putting in the hours, the personal sacrifices -- nor of the professions' extensive community contributions, pro bono work and so forth. Nor, in the context of these "vast" pay packages, is there any mention of capital contributions, interest on capital, retirement provisions, or, for that matter, the levels of risk and responsibility carried by top professionals. Enough of these stupid unbalanced reports, thank you, and let us congratulate, rather than criticise, those who provide high quality specialist services, employment for thousands, and in so doing achieve success and rewards.

  • Comment by Anonymous

    No-one needs or deserves annual earnings of £ 1 million however hard they work. So this just means that the firms are over-charging clients for work that could be done at a better price. The trouble is that the fees are approved by executives who are also over-paid and who support the absurd differentials in pay which have grown steadily over recent decades.

  • Comment by Anonymous

    What a ridiculous conclusion. Steady incomes mean that "vast" pay packages are not required to incentivise partners to stay. Utter rubbish. These are people who are operating at the very top of their game, and when you compare their salaries to counterparts in other industries or professions (such as banks, blue chips) they earn a pittance. Naïveté of the calibre shown by the author of this report really makes me angry. I can only hope that they weren't paid a vast package to deliver their pathetic, shallow and vacuous conclusions

  • Comment by Anonymous

    Partner pay is not salary - it is shared profit. They own the business, they generate the profits, they share the rewards. If they do not work hard to maximise profits, they earn less. At the same time they also pay junior staff very well, pay a lot of tax to HMRC and contribute a lot to charitable causes. I wish people would stop criticising others for creating success and wealth for themselves.