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Senior PwC staff in the UK who will never be partners are to be offered a new “managing director” title as the Big Four firm seeks to keep top employees whom it is unwilling to admit to its £1mn-a-year partnership.
People familiar with the matter told the Financial Times the UK firm had introduced the new grade to hold on to a key layer of senior accountants and consultants and to bring in external hires with higher salaries.
However, the role would not serve as a stepping stone towards becoming partner as managing directors would be ineligible for promotion to the top rank, they added.
The move underlines how the Big Four accounting firms are trying to balance the expansion of their workforces with protecting the profit pool that is shared between partners. Bosses have been under pressure in recent years to keep average partner pay near £1mn.
PwC’s UK partners took home an average of £862,000 this year, a 5 per cent drop on the previous 12 months.
Unlike its Big Four rivals — Deloitte, EY and KPMG — PwC lacks a non-equity partner grade in the UK, which is seen in the industry as a way of prolonging the track to partnership.
With 1,036 members, PwC’s UK equity partnership is the largest of the Big Four. Deloitte has 749 equity partners, while EY and KPMG have about 900 and 470, respectively.
PwC’s “managing director” position would allow the firm to offer higher salaries to external hires who were not going to pass all of the partner “threshold criteria”, one person briefed on the plan said.
“It won’t change the shape of partnership in the way others have done — at least not in the near term,” the person added.
PwC’s partners were informed about the new grade during an “away day” earlier this month at which Marco Amitrano, the firm’s new senior partner, outlined his strategy for the business, people familiar with the matter said.
The change comes as Amitrano embarks on the biggest overhaul of PwC’s UK business in years, creating a standalone technology and artificial intelligence unit and reorganising other service lines. The overhaul will affect around 2,700 staff and partners.
In a statement to the Financial Times, Amitrano said: “Our new MD grade will give us more flexibility to recruit and retain key talent. The grade is distinct to equity partner and opens up a new career path for high performers. It will create opportunity and give us greater agility in the market.”
