It may be all quiet now surrounding news on PwC’s deal to sell its government consulting unit to Allegro Funds. But one development that has accountants talking is the pay packets expected next year for PwC partners.
PwC partners have been told they will take a 30 per cent hit to their salaries next year, according to sources.
While a degree of financial pain was anticipated to the partners, 30 per cent was steeper than expected, and could be enough to prompt some key players to jump ship.
The market is waiting on news about the sale to Allegro of PwC’s government consulting unit, which would be renamed Scyne Advisory.
After the PwC scandal surrounding confidential leaks to clients about tax changes it was working on for the government, Allegro and PwC worked to put a binding term sheet in place to create distance between the accounting firm and the unit.
In recent weeks, it was still to be determined how many partners would go with the new unit, but the thinking is that Allegro must have had commitments from key players in the unit to sign up.
DataRoom understands that four or five private equity funds were approached to buy the PwC government consulting arm before a deal progressed with Allegro, including Anchorage Capital Partners and BGH Capital.
Allegro, which will own 75 per cent of the new firm, says it will inject $100m into the business for employment and operating costs, which are considered by the market to be for working capital rather than growth.
The expectation is that the contracts Allegro will have in place will include clawbacks and other adjustment mechanisms.
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