PwC chairman to receive £3.7m share of rising profits as business grows

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The chairman of PricewaterhouseCoopers in the UK, Ian Powell, is to receive a £3.7m share of the accountancy partnership's rising profits after a year in which the business grew by 5%.

Underlining a confidence in sustained demand for professional services, PwC also created 700 new jobs and took on 1,300 graduates and school-leavers during the year, taking total headcount to 18,100 by the end of June.

Powell said the strong performance of PwC's UK partnership reflected an improving British economy, where the appetite for investment was returning.

He said this was not just confined to London: "Encouragingly, the UK economy is showing positive signs of rebalancing. We are seeing significant growth potential in the UK regions."

Operations in the Midlands and in Yorkshire and Humberside were highlights, up by 7% and 9% respectively.

Powell's share of profits rises from £3.6m to £3.7m for the year while fellow board executives are to receive an average of £1.83m. The average profit-share payout for the partnership's 814 members in the UK was £722,000, up 2% on the previous year. Underlying profit windfalls for Powell and his fellow PwC partners have risen by considerably more because changes to certain tax treatments no longer require them to contribute individually to the tax bills of PwC subsidiaries.

Overall pretax profits for the UK partnership rose by 5% to £793m on the back of revenues, also ahead by 5%, of £2.81bn. Among the highlights was a strong performance from PwC sales to government, which rose by 27% to £240m. But revenues from FTSE 100 clients fell by 3% to £441m. PwC is often noted for its market-leading role in auditing the accounts for these clients – it carries out 40% of audits for members of the blue chip index – but this work accounts for only about 5% of its overall revenues.

One of the main sources of revenue growth continues to be its tax advisory practice, which is the largest in the UK among the big four accountancy firms. This division saw revenues increase by 5% to £714m, a quarter of the partnership's turnover.

In its annual report, published on Monday, PwC acknowledges the "continued spotlight on corporate taxes". In its review of the tax practice, the report says: "The world is changing, and our focus over the last year has been to continue to adapt, transform and diversify our business." It added that a global code of conduct has been "refreshed".

"The code helps us best serve our clients by ensuring we balance their technical needs with reputational concerns."

PwC said it had provided more than 6,000 hours of free technical support, worth £400,000 to political parties during the year, up by more than 20%, with almost 4,500 hours going to Labour and the balance mainly to the Liberal Democrats.

PwC's party donation history at the Electoral Commission shows their offer of support for the main political parties is typically taken up by those on the opposition benches. The accountancy profession has been criticised for getting too close to politicians and government offices.

In its annual report, PwC said: "The firm has no political affiliation and does not make any cash donations to any political party or other groups with a political agenda. However, in the interests of the firm and its clients, we seek to develop and maintain constructive relationships with the main political parties."

Powered by article was written by Simon Bowers, for The Guardian on Monday 15th September 2014 00.02 Europe/London © Guardian News and Media Limited 2010


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