PricewaterhouseCoopers payments to junior and senior partners revealed
The company distributed nearly $470 million in profits to more than 500 partners for an average revenue of more than $900,000 in fiscal 2019, according to the most recent data seen by the Financial analysis. PwC declined to comment.
Liability and Remuneration
The results and partner payouts come from the last full year of results before the pandemic, when the company posted annual revenue of $2.6 billion under former chief executive Luke Sayers.
PwC also made separate payments worth more than $90 million, or about $140,000, to more than 600 eligible retired partners in 2019.
Partners suffered a 15% drop in average income in fiscal 2020 due to the initial pandemic shock, before enjoying an 18% rebound in average income in 2021. This means that the average salary of partners in the prior fiscal year was approximately in line with 2019 revenues.
Details of partner compensation data provide unprecedented insight into how profits are distributed across the business and the compensation range between the most junior and senior partners.
Nearly 30 partners, with the lowest liability rating of 3.6, earned just over $380,000 in fiscal 2019.
The most common income level was the 3.1 rating, with nearly 70 partners earning over $760,000 a year each.
About 150, or nearly one in three partners, earned more than $1 million for the year, with 12 of this group earning more than $2 million for the year.
An associate’s level of compensation within the company is determined by their “responsibility rating”, with each rating then being assigned a target income by the company’s board of directors.
A partner’s rating can change over time, with partners typically receiving around 80% of their earnings between July 1 and June 30 of any given year. The rest is paid outside this period.
Closely guarded compensation information is shared with corporate partners for a limited period each year as a measure of transparency.
PwC v Deloitte payroll partner
Partner income information is not publicly available for the Big Four consultancies due to fewer statutory financial reporting requirements for private partnerships.
In 2019, the Financial analysis revealed partner compensation ranges for Deloitte. This showed that financial partners in Deloitte’s consulting arm earned between $590,000 and nearly $2 million.
Direct comparisons between companies are difficult to make due to the different way they organize partner payments. Deloitte partner compensation data is organized by service line, instead of an overall assessment of responsibilities at PwC.
However, partner compensation data from both firms indicates that at senior levels, PwC partners are likely to earn more than they would at Deloitte.
“The median salary for PwC partners is roughly the same as the actual salary received by ASX 300 CFOs in 2021,” said Donald Hellyer, chief executive of OpenDirector, a company that collates data on executive compensation.
“While ASX 300 CFOs have additional responsibilities as a publicly traded company, a professional partner must market and build customer loyalty.
“However, a CFO is solely responsible for the finances of a publicly traded company, and therefore you would expect them to be paid more – whereas most associates, while contributing to the company’s bottom line, don’t have the same level of responsibility.”
Mr Hellyer said about 3% of ASX 300 CFOs took home more than $4 million in 2021, compared to just one PwC partner taking home “a very high amount of $3.9 million”.
He said: “The top performers of the ASX 300 and PwC are generously rewarded.”