Ernst & Young pay bonanza threatens to reignite City salaries row

Pound Coin

Ernst & Young, one of the world’s big four professional services firms, has handed out average pay of £700,000 to 696 UK partners in a move that could rekindle concerns about high City pay and market dominance.

The latest bonanza comes after the British side of the EY business increased its annual revenues by 8% to more than £2bn in the 12 months to 3 July, it will reveal on Thursday.

Profits available for distribution among the senior staff in London and across the UK were also up 6% to £437m. The average payout of £700,000 was slightly down on the previous year because 95 new equity partners were appointed.

Growth was not as fast in the UK as some other places particularly in developing nations with EY reporting annual global revenues of $28.7bn (£19bn), an increase of nearly 12%.

EY said it was creating thousands of British jobs, giving it a UK headcount of 14,000. “I am very proud of the jobs that we have created this year, especially as we continue to provide more opportunities for school leavers as well as experienced hires and new graduates,” said EY’s UK chairman, Steve Varley.

“We have recruited over 4,500 people in the UK to fuel our growth and we plan to continue this level of investment as part of our ongoing global growth strategy.”

The services company said almost a third of the 95 new equity partners taken on this year were women and 11% came from ethnic minorities.

EY said it was “very positive” about the health of the British economy, and was pleased to have won new work as auditors for the BBC, RBS and Shell as well as Sainsbury’s and the Co-operative Bank.

But there has been growing unease since the financial crash of 2008 that EY – and its rivals KPMG, PwC and Deloitte – have such a dominant role, especially in auditing and accounting of the wider corporate market.

Guy Jubb, the global head of governance and stewardship at Standard Life Investments, described the big four’s oligopoly as an “accident waiting to happen”. Speaking in Washington last year to a gathering of regulators, he said: “Regulators have taken too long to grasp the nettle of big four dominance.”

Powered by Guardian.co.ukThis article was written by Terry Macalister, for theguardian.com on Thursday 1st October 2015 00.07 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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