PwC partners sacrifice pay to save staff jobs in tough Covid year but chief Kevin Ellis sees business pick up from booming IPO market

PwC’s UK partners will see a 10% cut in their pay for last year to £685,000 after Covid-19 hit profits but chairman Kevin Ellis said recent months had been strong thanks to the boom in takeover deals and flotations.

In the year to June 30, PwC profits fell 8% to £938 million after rapid initial growth juddered to a halt in the pandemic.

Staff bonuses will be around 72% of last year’s levels but will arrive in time for Christmas, Ellis said.

Partner share and bonuses are usually announced in autumn but PwC delayed this year’s while it monitored the impact of Covid.

Ellis said: “Covid had a big impact, but more recently we had a big increase in deals. The deals market is really really hot now, bringing lots of work for our due diligence teams. 

"We’ve seen a real pick up from Autumn and it’s very much deals-led, not consultancy, which is down.”

PwC partners get paid a monthly amount known as a “drawing” during the year then at the end receive a “distribution”, or share, of the profits minus what they have already received.

Ellis said: “We were very clear at the start that partners would reduce their drawings to protect jobs and that’s what we’ve done.”

He added that he remained optimistic about London post-Covid and Brexit. “London has such a strong professional services and that often gets forgotten in the wider world.”

He pointed out that a third of all funding into European IPOs this year had been raised in London.

“And that’s despite Brexit,” he said. “We play a strong game, we’re a great place to do business and that’s largely because we have such strong professional services. We have to focus on the positives."

Ellis said he remained a keen proponent of the need for his staff to work in PwC’s offices if they can.

While some doommongers are claiming Covid has ended office life forever, he announced PwC was opening new offices in Watford.

“I am in the office today, and we’ve kept all 20 of our offices open since July. 

“Opening in Watford shows our confidence in the office as a place to come to work. Our clients like to see us in our offices and our staff like to work in them.”

On average, through the panemic, 3500 PwC UK staff have been working in the office out of a total capacity of 6500, with 70% having spent some time there.

He said it was vital to get a Brexit trade deal to bring certainty to businesses.

“It’s what all our clients are hoping for. We all want to be able to go into the Christmas break knowing what lies ahead of us,” he said.

No deal would just mean further negotiations into 2021 and more confusion.

However, he acknowledged that even a trade deal would not be an end to the uncertainty as finer points of trade would need to be thrashed out.