One of the Big four accounting giants is considering splitting its business into two companies, a move that would include multimillion dollar payouts to most of the firm's partners.
According to the Wall Street Journal, a preliminary version of the proposal aims for the consulting group to go public in late 2023. The plan is still tentative and subject to approval by a partner vote, but it will give seven-figure windfalls to the highest-ranking employees.
According to the Wall Street Journal's report, the average partner at EY makes between $800,000 and $900,000. Under the proposal presented in May, partners staying at the auditing business would receive a cash payout of two to four times their annual pay, or roughly 1.7 million to 3.6 million for the typical partner. The average partner at the firm would get stock awards worth seven to nine times their annual pay.
The Big four accounting firms face more regulatory pressure to sell auditing and consulting services. The SEC is looking into the firms for possible conflicts of interest. The Journal reported that the auditing shop could have an advantage if it were to split up.
It would be the biggest shake-up of the accounting giants since the separation of Arthur Anderson.
There is still a long way to go. According to the Journal, executives expect to make a decision on the idea before the 4th of July. According to the Journal, if they move ahead, the partners would be able to vote later this year or in January of next year.
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