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Deloitte boss rakes in £5.2m after the bailout of RBS

4 Aug 2009


Deloitte, the accounting giant which nearly doubled its earnings from Royal Bank of Scotland just as the stricken bank was being bailed out by the taxpayer, today admitted it paid its senior partner £5.2 million last year.

While ministers and politicians have been haranguing bankers for climbing back on the multimillion pound bonus bandwagon, it emerged today that Deloitte has paid its boss John Connolly, a veteran financial services audit expert, nearly £11 million over the past two years.

Connolly's bumper pay, which confirms him as Britain's best-paid accountant, comes after despite a sharp downturn in Deloitte's profits, even after record fees from RBS, its most important client,.

The Evening Standard can reveal that Connolly, its long-standing senior partner and chief executive, was paid a total of £5.22 million. That compares with the £5.69 million he was paid last year.

Total payments to members of Deloitte's executive committee nearly topped £40 million for the year.

The level of Connolly's rewards are likely to raise eyebrows in Westminster. Deloitte has been seen as an indirect beneficiary of the banking bailout after it bagged fees of £58.8 million from RBS last year.

That represented a massive leap from the £31.4 million it billed in the prior year.

Of that £38.6 million came in audit fees, more than double the prior year, while additional fees for other services were nearly 50% higher at £20.1 million.

Critics have suggested the big bank audit firms should have played a role in blowing the whistle to regulators on the banks' out-of-control lending policies.

It was thought when RBS was part-nationalised that Deloitte would be removed. The firm was however retained at RBS's annual meeting.

For the year to the end of May, Deloitte, the UK's second-largest accountancy firm, reported a 6% slide in profits to £601 million on revenues down 2% to £1.97 billion, the first fall in income by any of the so-called Big Four accounting firms in six years.

Traditionally the best paid of the Big Four partners, last year's record earnings appeared to put Deloitte partners on track to earn on average more than £1 million a year each for the first time.

However, the profit distribution per partner last year fell 7.5% to £883,000. "Overall business performance was satisfactory in extremely tough markets," said Connolly, reporting growth of 7% in its core audit business.

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As I understand it the audit reports for RBS stated that the business could safely be treated as a going concern by creditors. How in hell was this an accurate reflection of the true state of affairs in RBS when it almost went to the wall in such a short time? Or was it perhaps that the auditor did not dare rock the boat with such a prestigious client? Something very fishy going on in the banking sector in general where the silence from the auditors is deafening.

- Colin Macpherson, Gramat France, 04/08/2009 19:56
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Where does this government subsidised gravy train end!

- Harvey, London, 04/08/2009 18:31
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