The average pay of a partner at accountancy firm Ernst & Young fell 16% to £378,000 last year as a result of the reduction in corporate activity in Britain and the US and tumbling stock markets.
Nick Land, the chairman, whose pay fell by £45,000 to just over £1m, said that the average profit per partner had been adversely affected by the costs associated with making 600 redundancies as well as other restructuring charges which were made necessary by the downturn in demand for its services.
“It is always sad when we have to ask loyal, committed people to leave,” said Mr Land.
Overall, Ernst & Young reported a 4% rise in revenue to £754m compared with a 15% rise the previous year. Operating profit in the year to June fell 13% to £158m.
The area of business that proved most resilient was corporate finance, which benefited from the demand for advice on restructuring troubled businesses or running others while they were in administration, most notably Railtrack. Here, revenues were 11% higher. In contrast, revenues in the specialist taxation area were just 1% higher because of the reduction in the level of mergers and acquisitions activity.
E&Y has taken on 25,000 people who used to work for Andersen, its former rival, which collapsed following regulatory action taken in the US concerning its audits of energy group Enron.
While Mr Land said he did not condone any unprofessional conduct by Andersen staff, he felt that the destruction of the firm was “disproportionate”.
He added that the accounting and audit business had “not been helped” by the reduction of the “big five” to the “big four”.
The big four are Ernst & Young, PriceWaterhouseCoopers, Deloitte & Touche and KPMG.
Mr Land said: “I don't believe this big four position is an ideal situation vis-à-vis customer and choice.”
He called for regulatory change in the UK, suggesting the financial reporting council should be used as an umbrella organisation, consolidating all the existing industry bodies.