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Accountants on first-class ticket for gravy train [Daily Mail, London :: ]
[August 26, 2014]

Accountants on first-class ticket for gravy train [Daily Mail, London :: ]

(Daily Mail (London, England) Via Acquire Media NewsEdge) Aug. 26--Accountants may be mocked for being boring, but top partners can have the last laugh all the way to the bank.

Big Four firm Deloitte, which chose to release its annual accounts over the Bank Holiday, paid its senior partner David Sproul pounds sterling 2.6m, down from pounds sterling 2.7m last year as profits have slipped, but still a plentiful sum.

Average rewards for Deloitte partners came in at pounds sterling 750,000 after providing for pensions and annuities for retired partners, again down from pounds sterling 772,000 last time.

Accountants largely fly below the radar in the debate on high pay, which focuses on the listed FTSE companies: they are obliged to produce detailed reports on executive rewards and to submit them to a shareholder vote.

But there is a further swathe of well-rewarded individuals at accountancy and law firms where the picture is far less transparent.

Deloitte at least does make disclosures on rewards, albeit that Sproul's payment is tucked away in the notes to the accounts.

The case against more transparency is that the firms concerned are partnerships and not answerable to shareholders, so they should be entitled to their privacy.

But the sums of money are large. The High Pay Centre, in a recent report, estimated that almost 1,400 senior accountants and lawyers were paid more than pounds sterling 1m last year.

In the case of Deloitte, information on pay is highly relevant to shareholders, since the firm operates one of the UK's leading 'remuneration consultancies' with a staff of 70 professionals advising on executive pay, share schemes and the like.

How can it do so in an objective way, when its own senior partners are fully-fledged members of the high pay club themselves, one might wonder.

There is also the issue of the heavy traffic from leading accountancy firms into FTSE 100 boardrooms, where a number of former auditors occupy senior directorships and chairmanships, and may sit on pay committees.

Again, their experience of well-padded pay packets does not obviously equip them to take a critical stance. Accountancy firms in general did not cover themselves in glory in the financial crisis.

Deloitte, which is Fred Goodwin's alma mater and the auditor of RBS, did not raise any alarms about his reckless empire-building.

The firm is also appealing against a fine last year of pounds sterling 14m for failing to manage conflicts of interest when it acted as an adviser for the collapsed car firm MG Rover, a scandal dating back to the turn of the millennium.

But as in the corporate sector, it takes more than a few little local difficulties to derail the gravy train.

–––– The idea that an independent Scotland should simply shrug off its share of the UK's national debt if the three Westminster parties continue to refuse a currency union is as disgraceful as it is impractical.

As well as the moral indignity, reneging on its share of the debt would be likely to be seen as tantamount to default, diminishing Scotland's credibility on the financial markets.

Alex Salmond's original idea was for an independent Scotland to adopt the euro, back in those halcyon days when he thought the country could become part of an arc of prosperity with Ireland and Iceland, and he was praising RBS and HBOS as global leaders.

The euro itself is under enormous stress, essentially because it is a currency union without a political union.

It is that flawed model – with taxpayers in the rest of the UK essentially writing a blank cheque to the Scots –that Salmond has been saying he wants, and that he has been claiming Westminster will provide, despite declarations to the contrary.

Why voters in the rest of the UK would agree to it, even if politicians were prepared to go there, is left unanswered.

Business people are belatedly speaking out for the union. HSBC's Douglas Flint warned of capital flight and Weir Group boss Keith Cochrane is organising a letter from business leaders. Not before time. This is a decision that appeals to the emotions, but will have far-reaching consequences for the Scottish economy.

___ (c)2014 Daily Mail (London, ) Visit the Daily Mail (London, ) at Distributed by MCT Information Services

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