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EY: partners’ payday sets a high watermark for successors
Corporate push to go digital is likely to keep consultancy tills ringing but there are pressure points elsewhere
EY is the latest Big Four accountancy firm to reward its UK partners with a bumper payday. An 11 per cent increase in distributable profits resulted in 781 partners each pocketing an average £749,000, up from £667,000 the previous year.
The firm’s newbies, including 900 graduates, might well wonder if the bounty will be quite so generous when the smart and lucky ones have risen up the ranks.
Special factors were at play in the pandemic year. Lockdowns curtailed travel and entertainment, cutting costs. The rush of dealmaking triggered by the upheaval — and mountains of private equity dry powder — drove revenues from the strategy and transactions unit. Sales rose 12 per cent and accounted for a fifth of the total.
Consulting also had a good year. The unit’s sales increased 9.5 per cent and were around a quarter of the group. This is a profitable métier, as politicians discovered when they learnt that NHS Track & Trace paid consultants an average £1,100 a day and, as at April, employed 2,239 of them.
While Deloitte was the main beneficiary of that programme, EY counts on government and infrastructure for some of its fastest growing business.
Even if state spending is curtailed, the corporate push to go digital is likely to keep consultancy tills ringing. There are pressure points elsewhere. Not least of these is auditing, the biggest slice of business, where regulatory scrutiny and fines threaten to depress margins.
The bigger issue for EY is a growing number of mouths to feed. As of now there are already more than 800 partners, up from an average of 700 in 2019. The ranks are swollen by promotions and acquisitions. EY bought five companies in the past six months, including Frank Hirth, a personal tax services business.
These newcomers are meant to bring in enough new business to earn their keep. Other Big Four firms have waved off their restructuring arms to private equity: Deloitte’s to Teneo, KPMG’s to HIG Capital. If the smartest guys in the room really are the financial sponsors, EY may be making the right bet.
Blatter and Platini face fraud charges in Fifa corruption probe
Former heads of world and European football indicted by Swiss authorities over $2m payment
Sepp Blatter and Michel Platini, the former heads of world and European football, have been charged with fraud by Swiss authorities as part of a long-running corruption investigation into conduct of executives who once ran the world’s favourite sport.
The men were indicted on Tuesday following a six-year investigation into a SFr2m ($2m) payment authorised by Blatter to be paid to Platini in 2011, which was allegedly made for backdated additional salary.
The Swiss Attorney General’s office said on Tuesday: “This payment damaged Fifa’s assets and unlawfully enriched Platini.”
At the time, Blatter was the president of Fifa, world football’s governing body, while Platini, a former French national team captain, was the president of Uefa, the organisation that runs the game in Europe.
Blatter, 85, and Platini, 65, have each been charged with fraud, misappropriation, criminal mismanagement and forgery of a document. They now face a trial within months at federal criminal court in Switzerland.
Over the past decade, Zurich-based Fifa has faced multiple corruption investigations from US, French and Swiss authorities. Dozens of football officials have been arrested, indicted or imprisoned as a result of alleged bribes paid to top football executives over many years.
Blatter and Platini were forced to resign over revelations that corruption was pervasive at the top of Fifa. They faced an ethics investigation into the SFr2m payment which led to bans from working in football, in effect ending their decades-long careers in the sport.
In 2019, Platini was also questioned by French police over his involvement in the awarding of the upcoming 2022 World Cup to Qatar.
“I view the trial before the Federal Criminal Court with optimism — and hope that with it this story comes to an end and all facts are properly dealt with,” Blatter said in a statement through his lawyers. He reiterated that the payment was based on a verbal agreement he made with Platini and that Fifa had given its approval.
Platini said: “I fully challenge these unfounded and unfair accusations.”
Fifa did not immediately respond to a request for comment. Uefa declined to comment.
Blatter’s successor at Fifa, Gianni Infantino, was elected in 2016 after pledging to clean up the organisation.
In May, Stefan Keller, a Swiss special prosecutor who had spearheaded a separate corruption investigation into meetings held between Infantino and former Swiss attorney-general Michael Lauber, was forced to step down. That move appeared to close down legal probes into Fifa executives.
Fifa has sought to move on from Blatter’s leadership, such as by pointing to its co-operation with US authorities on their investigations. The US Department of Justice said in August that it would hand back to Fifa more than $200m in seized forfeited funds linked to the scandal.
Men with ‘golden penis syndrome’ are ruining sex and dating for women
Beware of the college grad cad!
Men with college degrees have become so cocky that they’re ruining romance for their female counterparts, one “leading expert” alleges.
Just 40.5% of college students in the United States are male, according to the National Student Clearinghouse, meaning they’re in short supply and high demand when dating on campus.
A lack of competition has led these men to develop “golden penis syndrome” — an arrogance that stems from the assumption that a steady supply of females will be sexually interested in them.
“Golden penis syndrome” has led these smug males to engage in dastardly dating practices, such as cheating and ghosting, because they’re confident that another woman will always be waiting around the corner.
The term was purportedly coined by frustrated female students at Sarah Lawrence College in upstate New York — where three-quarters of all enrollees are the fairer sex.
Journalist Jon Birger believes many college-educated men in their 20s, 30s and 40s have also developed GPS because they’re similarly in high demand when it comes to dating.
“The sex ratios among college-educated, hetero singles in Manhattan is approximately three women for every two men. I’ve interviewed a lot of men who were continuing to take advantage of that imbalance,” Birger told Mel Magazine.
“[And] 1981 was the last time that four-year colleges in the US graduated more men than women. Ever since, women have been leaving men in the educational dust.”
Birger — who penned the best-selling book “Date-onomics: How Dating Became a Lopsided Numbers Game” — further explained to the Daily Mail: “We’re seeing a generation of young men who think they’re Adam Driver or Michael B. Jordan. Of course, it’s not about them. It’s the ratio.”
He continued: “When men are in undersupply, the dating culture becomes less monogamous — men are more likely to treat women as sex objects and treat relationships as disposable.”
Not only are men with “golden penis syndrome” more likely to treat their dates badly, they may also be less inclined to put effort into their physical appearance and their sexual performances.
Birger previously spoke with The Post, declaring that dating was particularly dire for heterosexual women in New York.
College-educated women are more likely to date among their own milieu of college-educated men, but as their numbers are so skewed, they’re in for a rougher time.
Birger told The Post that the imbalance is also exacerbated by New York’s large population of gay males. Some 9 to 12 percent of men in Manhattan are gay, according to Gary Gates, a demographics expert at UCLA’s Williams Institute.
But Birger had some trusty advice for female singletons seeking to settle down: Be cautious of the college-grad cads.
“I would be wary of guys who have remained never-married into their late 30s and 40s,” he explained to Daily Mail. “Especially the better-looking ones with good jobs. These men are having too much fun playing the field.”
He also advises women to be assertive when pursing romance, stating: “Fact is, men like women who like them. Also, a man is much less likely to take advantage of a woman who puts herself out there.”
DealBook
The Treasury Department wants to rein in stablecoins.
Seeking stability
Financial regulators have urged lawmakers to act fast on legislation to address the rising risk of stablecoins. This type of cryptocurrency — ostensibly backed one-to-one by a stable asset like the dollar, making it more practical as a means for trades and transactions — is booming, with some $130 billion now in circulation. Stablecoin issuers, such as Tether and Circle, are not banks and they are not simply tech companies that sell online services: They operate as both and have few rules to guide them.
In an eagerly anticipated report that the Treasury Department released Monday, officials warned that without more oversight, the rise in reliance on stablecoins could result in bank runs, consumer abuse and payment snafus, and potentially threaten the wider financial system.
Stablecoin issuers should be treated like banks, the report recommended, subjecting them to the same reserve requirements as traditional financial institutions to ensure they can meet the demands of customers to cash out quickly. Others involved in the stablecoin transfer process should be subject to more rules, too, regulators said, including companies that provide services for holding stablecoins. Currently, federal law cannot prevent retailers and other commercial companies from issuing their own stablecoins, potentially creating risky overlaps between commerce and banking.
Delay is dangerous, the regulators said. Stablecoins have not always been as securely backed as issuers claim. “A run occurring under strained market conditions may have the potential to amplify a shock to the economy and the financial system,” the report warned. The S.E.C., C.F.T.C. and other agencies have the power to police certain stablecoin issuers, but the report identified regulatory gaps that only legislators could address. If Congress does not act quickly, the Financial Stability Oversight Council, a body created after the 2008 financial crisis, could step in and designate stablecoins as a potential systemic risk, granting regulators new powers.
Some say legislation isn’t a speedy path to rein in crypto. Tyler Gellasch, a former S.E.C. lawyer who now leads the Healthy Markets Association, questioned whether Congress would take the necessary steps. “Given the incredible growth of the industry and its lobbying prowess, there’s no guarantee that new legislation will lead to more oversight, and frankly, it’s likely to lead to less,” he said. “This report is unquestionably the starting gun for the crypto lobbying games.”
Gapping down
In reaction to earnings/guidance:
- CHGG -31.4%, SMLR -24.5%, ESPR -7.8%, NBIX -7.7%, EVER -7.6%, GNRC -6.5%, BWXT -5%, PNTG -5%, LCII -5%, ADTN -4.8%, RIG -4.5%, SRCL -4.2%, VRNS -4.1%, WAT -4%, LEG -3.5%, MOS -3.5%, RMBS -3.4%, GPN -3.4%, BP -2.7%, BLMN -2.6%, PLOW -2.3%, TWNK -2.2%, SAGE -2.1%, CRSR -2.1%, EL -1.9%, USAC -1.7%, BCC -1.6%, NXPI -1.6%, HSC -1.5%, CMI -1.4%, APO -1.1%, CACC -1%
Other news:
- CLNN -27.3% (announces top-line results from Phase 2 RESCUE-ALS clinical trial)
- LEGN -9.8% (FDA extends PDUFA target date for ciltacabtagene autoleucel to Feb 28, 2022)
- IVC -7.9% (to be removed from S&P SmallCap 600)
- VRT -5.1% (stock offering)
- ABR -4.1% (prices offering of 7.5 mln shares of common stock for gross proceeds of $147.8 mln)
- TSLA -3.8% (to recall 11,700 vehicles over communication problem - CNBC; Elon Musk responds to tweet about TSLA's stock price)
- ACAD -2.2% (names new COO)
- SHLX -1.3% (common unit offering)
- NEP -1.2% (stock offering)
- IGT -1.2% (signs licensing deal with Authentic Brands, owner of Marilyn Monroe Estate)
- DD -1.2% (acquired ROG for $277 per share; also reported earnings)
- ABG -1.1% (stock offering)
- PI -1% (convertible notes offering)
Analyst comments:
- IQ -4.4% (downgraded to Neutral from Buy at UBS)
- YY -4.3% (downgraded to Sell from Neutral at Goldman)
- EXPE -1.3% (downgraded to Neutral from Overweight at Atlantic Equities )
- XOM -0.9% (downgraded to Sell from Hold at Truist)
Gapping up
In reaction to earnings/guidance:
- ANET +20.4% (also approves a 4-for-1 stock split), FN +12.4%, UAA +9.5%, UNVR +9.3%, HLIT +7.2%, CAR +7%, ZI +6.8% (also stock offering), KFRC +5.1%, EXTR +5%, ADCT +4.8%, LPX +4.6%, ROK +4.1%, SPG +4%, WLK +3.7%, IT +3.5%, PFE +3.2%, MCK +3.1%, ACRS +2.8%, MGY +2.6%, ZBRA +2.5%, HSIC +2.5%, EXLS +2.4%, NRZ +2.2%, GXO +2.1%, ADUS +2.1%, MPLX +2.1%, CLX +2%, BRKR +1.9%, VNOM +1.8%, LXU +1.7%, HEES +1.7%, CTLT +1.6%, CRUS +1.4% (also CFO to retire), MTRN +1.4%, BSM +1.3%, BHC +1.2%, WFRD +1.1%, OGS +1%, NTR +1%, INCY +0.9%
Other news:
- ROG +31.5% (to be acquired by DuPont for $277 per share in cash; also reported earnings)
- OSUR +9.4% (announced that the EUA for its InteliSwab COVID-19 rapid tests has been amended by the U.S. Food and Drug Administration to only require one test for individuals with symptoms of COVID-19)
- ENDP +8.9% (issuance of tentative favorable ruling in California state court following opioid trial )
- TEVA +6.1% (California Judge rules that Teva did not cause a public nuisance or make false or misleading statements about opioids)
- INVZ +4.8% (issues statement in light of recent trading activity)
- NTCT +4% (to join S&P SmallCap 600)
- BCOV +3.1% (activist shareholder writes letter to co)
- TCRR +2.2% (expands US manufacturing capacity)
- CNTX +2% (names new CFO)
- ALEX +1.7% (names new COO)
- MVST +1.3% (purchases new R&D center in Florida)
- DELL +1.3% (DELL completes planned spin-off of 81% equity ownership of VMW)
- KAMN +1.2% (receives award to provide components to leading eVTOL company)
- NVTS +1.2% (NVTS and Xiaomi highlight alignment on future GaN applications)
- EVLV +1.2% (names new CFO)
Analyst comments:
- AA +1.3% (upgraded to Buy from Hold at Jefferies)
- EPAC +1.1% (upgraded to Equal Weight from Underweight at Wells Fargo)
Early premarket gappers
- Gapping up:
- ROG +29.5%, ANET +14.8%, UNVR +10%, FN +9.4%, ZI +8.2%, BCOV +6.7%, CAR +6.7%, TEVA +6.1%, CNTX +5.4%, KFRC +5.1%, HLIT +5%, ZENV +4.3%, SPG +4.2%, IT +4.1%, BRKR +3.4%, MCK +2.8%, VNOM +2.6%, GXO +2.4%, EXLS +2.4%, TCRR +2.2%, LPX +2.2%, INVZ +2.1%, ADUS +2.1%, FE +1.9%, ALEX +1.7%, CLX +1.6%, DELL +1.5%, CRUS +1.4%, MVST +1.3%, BSM +1.3%, KAMN +1.2%, NVTS +1.2%, EVLV +1.2%, WFRD +1.1%, OLN +1%, HOLX +1%, SKT +0.8%, VMW +0.7%, AZN +0.7%
- Gapping down:
- CHGG -31.9%, SMLR -17.3%, EVER -9.1%, LEGN -8.9%, IVC -7.9%, BWXT -7.3%, NBIX -5.9%, PNTG -5%, GNRC -4.9%, GNRC -4.9%, VRNS -4.8%, RIG -4.8%, ADTN -4.8%, TSLA -4.6%, ABR -4%, DD -3.7%, CACC -3.7%, VRT -3.6%, RMBS -3.4%, BP -3.1%, PLOW -2.3%, ACAD -2.2%, MOS -1.6%, NEP -1.2%, O -1.2%, FANG -1.1%, PI -1%, FUBO -1%, NXPI -0.9%, ELY -0.8%
>>> Up
* Lufthansa Raised to Buy at Kepler Cheuvreux; PT 8 euros (+)
* MTU Aero Raised to Hold at M.M. Warburg; PT 200 euros (+)
* Rentokil Raised to Hold at Berenberg; PT 510 pence
* Rovio Raised to Buy at Berenberg; PT 8.80 euros
* Sodexo Raised to Buy at Goldman; PT 105 euros
* Telenet Raised to Buy at New Street Research; PT 40 euros
* Swiss Re Raised to Buy at Bank Vontobel; PT 108 Swiss francs (+)
>>> Down
* Big Yellow Group Cut to Neutral at Goldman; PT 1,630 pence
* Coloplast Cut to Sell at Nordea; PT 960 kroner (+)
* Electrolux Professional Cut to Underweight at Morgan Stanley
* Elior Group Cut to Neutral at Goldman; PT 7.70 euros
* ERYTECH PHARMA CUT TO HOLD VS BUY AT JEFFERIES, PT EU2.8
* Ferrexpo Cut to Neutral at Credit Suisse; PT 370 pence
* ForFarmers Cut to Hold at KBC Securities (+)
* Homeserve Cut to Neutral at Credit Suisse; PT 860 pence
* Kongsberg Automotive Cut to Hold at Kepler Cheuvreux
* Ontex Cut to Hold at Kepler Cheuvreux; PT 9 euros
* PVA TePla Cut to Hold at Deutsche Bank; PT 40 euros
* Santander Mexico ADRs Cut to Hold at HSBC; PT $7.50
* Virgin Money UK Cut to Underweight at Morgan Stanley
>>> Initiation
* AssetCo Rated New Buy at Panmure Gordon (+)
* Entain Resumed Overweight at Morgan Stanley; PT 2,430 pence
* Exclusive Networks Rated New Equal-Weight at Morgan Stanley
* Exclusive Networks Rated New Neutral at JPMorgan; PT 22 euros
* Exclusive Networks Rated New Outperform at Exane; PT 25 euros
* Greggs Rated New Buy at Panmure Gordon; PT 3,860 pence
* Redde Northgate Reinstated Buy at Jefferies; PT 510 pence
* Stillfront Rated New Buy at Kepler Cheuvreux; PT 51 kronor (+)
* TUI Resumed Buy at BofA; PT 300 pence (+)
>>> Call
* Adecco 3Q Broadly in Line, No Change to Investment Case: RBC (+)
* Burckhardt Seen Higher; ZKB Says Order Intake Beat ‘Massively’ (+)
* Peel Hunt Sticks to Darktrace Sell Rating Amid Investor Pushback (+)
* Electrolux Professional Cut at Morgan Stanley on Ebbing Momentum
* Entain Overweight at Morgan Stanley on Leading Growth Profile
* Fresenius Medical FY22 Recovery Key After Guide Cut: Jefferies (+)
* HelloFresh Rises Premarket; Jefferies ‘Impressed’ by Update (+)
* Homeserve Downgraded at Credit Suisse on Checkatrade Challenges
* Rentokil Risks Balanced on Strong Pricing; Berenberg Upgrades
* Rovio Upgraded to Buy at Berenberg With Strong Trends Emerging
* Strong Earnings in Europe Suggest Further Upgrades: Bernstein
* TUI Well Placed for Pent-Up Demand, BofA Resumes Coverage at Buy (+)