EY To Shower Millions On Its Partners After Break Up

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EY’s partners are dreaming of a luxurious vacation already. And why not?

The accounting firm might soon make each of its 13,000 partners rich by millions as soon as next year if its global leadership decides to split EY’s audit arm from its advisory operations. 

Why the break-up? The increasing risk of providing corporate audits and the growth potential of consulting services are driving EY’s push to sell/list its advisory business. The break-up of the 312,000-person firm is also an attempt to escape the conflicts of interest that have dogged the profession and attracted intense scrutiny from regulators around the world.

New Baby On The Way?

A spokesperson also said a new type of firm could possibly be created if EY can pull off the split successfully. A preliminary version of the break-up proposal, codenamed ‘Project Everest,’ will take care of the consulting group’s IPO pencilled in for late 2023. This will also hive off the consulting business from the group of accountants who audit clients such as Facebook, Google, Amazon, and Oracle. 

The audit business would remain a network of partnerships after the break-up, while its advisory business would become a public company.

Besides relying on optimistic growth targets, the Big Four firm is hoping to sell about 15% of the consulting business for more than $10bn, leaving 70% in the hands of its partners. 

Let It Rain $$$

The new partners joining the consulting arm are expected to receive shares worth between 7-9 times their annual remuneration, potentially reaching a value of $8 million. 

Partners in the audit business are set to receive a cash payout from the IPO worth about 2-4 times their annual pay under the plan, which would be about $2 million based on their average salaries of $850,000 to $900,000 a year.

Too long? Here’s a one-liner: EY’s plan to split its consulting and auditing arms under ‘Project Everest,’ will follow multi-million payouts to each of its 13,000 partners worldwide; talks on launching IPO are underway.

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