Deloitte partners released their salaries as part of their 2020 financial release. Before we get to the pay cut let’s discuss their overall financial results.
Deloitte UK results were 4.31 billion pounds in 2020 versus 3.95 billion pounds in 2019.
They moved to 20,000 employees and 1,183 partners. I’m not sure how they get to 1,100 partners on the face of their report when everything else says they only have 709 partners in the UK.
Deloitte not making headway towards social justice goals
If you take a look at this report, it has a lot of social justice metrics that aren’t very favorable to Deloitte. Despite all of the big 4 accounting firms measures over the past decade to encourage diversity, they have not made much progress.
They have made slight progress towards their female partner metrics. From 2018 to 2020 they moved from 18.55% to 21.74%. However their goal was to have 25% female partners by 2020.
They plan to have 40% female partners by 2030.
The ethnicity pay gap has not improved either.
The big story from this report is that Deloitte partners took a pay cut.
Deloitte Partners Pay Cut
The headlines you are seeing everywhere is that partners in the UK took a paycut of 17%. Where did people get this number? Well it is pretty amazing that Deloitte actually releases their partner pay in the UK. This shows that partners made 731k on average in the UK. This is about $950k in the United States. That is insane that partners make that much in the UK. I’m sure this is because many of the partners in the UK are in London and London has a high cost of living.
Why did their pay go down? Well according to their report distributable profit went down by 16% to 518 million pounds.
In prior year they had 617 million pounds of distributable profit.
This was based off of revenue of 3.9 billion and employees of 19104. In 2018 they had employees of 18,336 and revenue of 3.6 billion. That grew to 3.95 billion in 2019. From 2018 to 2019, they had a 4% increase in employees. However, they had a 10% increase in revenues. Partner pay increased from 832 to 882 from 2018 to 2019. That’s a 6% increase to partners.
This year employees went up to 21,219 and revenue went to 4.3 billion. That represents a 9% increase in revenue while employees grew by 11%. Costs went up big time while revenues did not grow at the same pace. This is likely due to consulting. If you look at their full scorecard you can see that their consulting businesses did not move up like they had in prior years.
Another reason distributable profit went down is because of the record fine that of 15 million that Deloitte incurred earlier in the year.
Partner pay went down as a result of them being to optimistic early in the year and hiring too many employees. We will have to see how this plays out in the future. If the partners get desperate, they will lay people off. They’ve already cut pension contributions for their employees earlier in the year.