By Irina Anghel, Bloomberg News (TNS)
PricewaterhouseCoopers Australia will cut partner pay by 30% next year following the tax document leaking scandal that wiped out profit for 2023.
Kevin Burrowes, who was appointed chief executive officer in June after former boss Tom Seymour stepped down in the wake of the scandal, apologized for past failures in leadership.
He is fighting to restore confidence in PwC Australia following revelations that a former senior partner obtained confidential tax policy information while advising the government. The firm then used it to advise global clients. PwC stands to lose millions of dollars in revenue due to its breach as clients review their relationship.
“Past leadership failed to meet the standards our people, our clients, the community and the Australian government rightly expect, and for that I apologize,” said Burrowes.
Seymour made A$4 million ($2.6 million) in 2023 even after the scandal, the firm said in its results published Sept. 1.
Despite growing revenue 11% to A$3.4 billion, profit was flat in the year to June 2023, because of the reputational damage caused by the leak, the company said.
Results for this year don’t include the sale of its government advisory business to Allegro funds for A$1. Government advisory work accounted for 20% of PwC Australia’s revenue in the 2023 financial year.
Together with the reputational fallout, the divestment is set to hit 2024 revenues, the firm said, meaning partner pay will be cut by as much as 30% in 2024. PwC’s Australia partners saw their average pay decline by 12% in 2023, with the lowest paid partner earning A$374,000.
In July, PwC named eight partners who had left the firm or would leave soon following an internal investigation into the leak of confidential tax documents by a former partner advising the government.
The firm is awaiting the results of an independent review of its governance, accountability and culture in late September. PwC will publish its own transparency report in response to that document, the company said.
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