Partners at Deloitte in the UK and Switzerland will receive an average income of more than £1m each for the second year in a row, after the accountancy firm enjoyed another successful year.
Each partner will receive an average distributable profit of £1,058,000 in the year to the end of May, about 33 times the UK’s average annual pay. This is the first time the sum has exceeded £1m and is an increase of about 24% compared with the same period the year before.
Equity partners do not receive a salary but instead receive a share of profits as income, with 672 of them sharing £711m in profits in the 2022 financial year.
While the average distributable profit rose, the total payout they received was flat year on year because the 2021 results were flattered by a £196,000 windfall for each partner after the sale of Deloitte’s UK restructuring business to Teneo, an advisory firm.
The big four accountancy firms – Deloitte, EY, KPMG and PwC – benefited from an increase in business in the aftermath of the coronavirus pandemic as companies made a wave of mergers and acquisitions (M&A) and looked to introduce newer technology.
Deloitte, which has 20,000 UK employees, said “resilient markets and corporate investment” had driven revenues up in the combined UK and Switzerland by 10% to £4.9bn during the financial year, with business growing in all areas. Revenues grew fastest, up 15% year on year, in the consulting division, which advises businesses on changes such as new technology.
However, Deloitte has not escaped scandal. In April the UK’s accounting regulator, the Financial Reporting Council, said it was investigating Deloitte over its audit of the bus and rail operator Go-Ahead over wrongly withholding £50m of taxpayers’ money. The regulator is also investigating Deloitte’s audits of the motoring group Lookers and building materials company SIG.
Other big accountancy firms have also enjoyed rapid growth in the past year. Last week EY reported that global revenues rose by almost 14% in the year to June. PwC partners also received an average payout of more than £1m in the same period – albeit one flattered by the sale of another business.
The post-pandemic M&A boom has waned dramatically over the course of 2022, with global deals so far worth a third of what they were in 2021 as businesses brace for a possible global recession, according to Dealogic, a data company.
Nevertheless, accountancy firms are still looking at growth areas such as increased demand for sustainability reporting, as well as the continued introduction of digital technology.
Richard Houston, a Deloitte senior partner who also serves as chief executive, said: “Demand for all our services was strong, particularly in cloud technology, digital transformation and M&A services.
“Our results have enabled us to make record investments – the highest in over a decade – in reward, promotions and skills. We enter the new financial year with momentum and are well placed to navigate the current economic headwinds.”