Partners’ pay packets to be cut by 5% at Deloitte

Equity partners in the UK arm of Deloitte will suffer a 5 per cent pay cut as the accounting group makes “difficult choices” in a tough market.
Deloitte UK’s 27,000 accountants and consultants generated fees of £5.7 billion in the year ended in May, a 2 per cent rise on the previous 12 months.
However its distributable operating profit, the sum shared by its 749 equity partners in the UK and Switzerland, was flat at £756 million. Average profit per partner fell by 5 per cent; they will receive just over £1 million each.
Richard Houston, the chief executive of Deloitte UK, said the results were strong in the context of a “difficult economic and geopolitical backdrop”.
“Like many businesses we had to carefully consider our cost base and make some difficult choices this year,” he said. “We were therefore pleased to be able to recognise our people for their hard work with sustained promotion levels and investments in reward and benefits.”
He pointed to a 5 per cent increase in average pay and bonus for people below partner level.
Revenue at Deloitte’s tax and legal business grew by 3 per cent to £1.25 billion while its audit and assurance business grew 8 per cent to £941 million. Consulting revenues dropped 1 per cent to £1.58 billion, which the firm said reflected “more cautious investment in services” because of “economic conditions”.
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It added that there was still demand for digitisation projects such as cloud migration, technology modernisation and artificial intelligence evaluation projects.
Deloitte traces its roots to an accountancy firm set up by William Welch Deloitte in London in 1845 but more than half its revenue comes from the Americas. It employs 460,000 people worldwide.
This month the UK arm of the business said it would equalise maternity and paternity leave to try to boost the number of women in senior roles. From the start of next year, new fathers will get 26 weeks of fully-paid leave, the same as new mothers. At present fathers can only take four weeks.
Research by YouGov, commissioned by Deloitte, shows that most working mothers think that if their partner had more parental leave, it would help them to progress in their career.
Nearly half of Deloitte’s staff are women but they account for only 28 per cent of its 1,300 partners. The proportions are similar at rival firms.
This month the global Deloitte group reported its weakest revenue growth since 2010 as demand for its consulting services slowed sharply. Overall its revenues increased by 3.1 per cent to $67.2 billion in the year ended in May.
The Big Four accounting and consultancy firms — Deloitte, EY, PwC and KPMG — have all suffered from a slowdown in demand on the back of higher interest rates and weaker economic conditions.