EY chief Di Sibio to retire after failure of split plan

EY’s global chief executive Carmine Di Sibio has told partners he plans to retire next year, sparking a race to lead the accounting and consulting firm after the collapse of his plan to split it in two.

Di Sibio masterminded Project Everest, the once-in-a-generation break-up plan, but called off the deal in April after opposition from leaders of the firm’s US business.

His future has been in doubt since the collapse of Everest, which would have involved spinning off EY’s consulting arm and listing it on the stock exchange. Although he has continued to say that the deal was necessary to free consultants from conflict-of-interest rules, work on the doomed project cost more than $600mn and triggered bitter infighting.

On Tuesday, Di Sibio made it clear he did not intend to step down immediately, but would instead oversee the organisation through a long transition lasting until the end of the next financial year in June 2024.

In a partner webcast, he said he planned to leave “having reached the EY mandatory retirement age”.

His initial four-year term was due to expire this month but EY had extended his tenure for two years, allowing him to continue beyond the firm’s retirement age of 60 so that he could oversee the split, which he had argued would become a blueprint for other Big Four firms.

“I am proud of the bold vision we set out in Project Everest,” he said. “The courage that we displayed set the entire sector on a new course that will only become apparent in the years to come. We challenged the status quo, we asked tough questions and we were bold in our ambitions. Actions such as these will make us a better organisation in the long term. Now it is time to usher in a new generation of leaders.”

A succession process will begin in the next few months and a new leader is expected to be named around November, partners were told.

Di Sibio took over as global chair and chief executive in 2019, having risen through the ranks of EY’s US business serving financial services clients, including Goldman Sachs.

If Everest had gone ahead he would have led the new publicly traded consulting business. The audit-focused firm would have remained a private partnership under the EY brand, and its partners would have received cash windfalls worth up to four times their pay.

However, he misjudged the strength of opposition to the split in some quarters of the firm, notably among high-ranking partners in the US audit business, who objected to large parts of EY’s tax advice business being hived off into the new consulting company.

The firm expects to report global revenues of more than $50bn for the 12 months to the end of June 2023, up from $36.4bn when he took over in 2019.

Articles You May Like

AI is coming for our anger
Zilch warns it might ‘go somewhere else’ unless UK boosts IPO market
Germany urges EU-China trade talks but criticises Beijing’s exports to Russia
Fed criticises ‘living wills’ of Bank of America, Citi, Goldman and JPMorgan
Property group boss likens UK office values to ‘melting ice cubes’