• A plan to split EY's consulting and auditing businesses will handsomely reward the firm's 13,000 partners.
  • The Wall Street Journal reported most partners would be in line for multimillion-dollar payouts.
  • Partners first need to approve the plan, with a potential IPO set for late 2023, the WSJ reported.

Ernst & Young, one of the Big four accounting giants, is considering splitting its business into two companies, a move that would include multimillion-dollar payouts to most of the firm's 13,000 partners.

The Wall Street Journal reported on Monday that a preliminary version of the proposal, codenamed Project Everest, aims for EY's consulting group to go public in an initial public offering penciled in for late 2023. The plan is still tentative and subject to approval by a partner vote, but pursuing the split would provide seven-figure windfalls to the highest-ranking EY employees.

The typical US- or UK-based partner at EY makes $850,000 to $900,000, according to the Wall Street Journal's report. Under the latest proposal presented in May, partners staying at the auditing business would receive a cash payout of two to four times their annual pay, or roughly $1.7 million to $3.6 million for the typical partner, according to the Journal. Partners at the consultancy firm would receive stock awards worth seven to nine times their annual pay, translating to $5.95 million to $8.1 million for a typical partner.

The Big four accounting firms — Deloitte, PricewaterhouseCoopers, KPMG, and EY — have faced more regulatory pressure for selling auditing and consulting services. The Securities and Exchange Commission is reportedly probing the firms for potential conflicts of interest violations. In splitting up its businesses, EY's auditing shop could have an advantage by pitching itself as independent and free of conflicts, the Journal reported.

EY's possible split would be the largest shake-up among the accounting giants since Accenture separated from Arthur Anderson more than two decades ago.

The plan is still far from a done deal. EY executives expect to decide whether or not to move forward with the idea before July 4, according to the Journal. If they do move ahead, EY executives would pitch partners this summer on a global roadshow, teeing up a partner vote later this year or in January 2023, per the Journal.

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