✒ Like its Big Four rivals — Deloitte, KPMG and PwC — EY is made up of a network of national member firms in about 150 countries.
Unlike the parent company in a corporate group that can mandate its subsidiaries to do as it desires, EY Global cannot order the member firms to do what it wants.
Getting hundreds of leaders on board with this deal is therefore highly surgical, especially when the change is one that not driven by any crisis, and people don’t’ like change.
Another complication is how to create enough incentives for the audit partners — who will be asked to accept cash payments for two to four times their annual earnings in return for the likelihood of becoming the only large audit firm with limited consulting expertise; and consulting partners — who will get shares in the new advisory business and take a hefty cut to their annual pay, to split.
Paul Raleigh, former global head of advisory at Grant Thornton, says:
“As in most divorce settlements there is usually some lingering resentment that your former partner did better than you did.”