Dusseldorf “Time flies” – time flies by: With this wisdom, the current management of PwC presents itself on the company website with personal photos from past and present. For the incumbent Germany boss Ulrich Störk, these words got a new meaning at the beginning of the week: he has to give up his position after only four years.
His successor next summer will be Petra Justenhoven, who has so far been responsible for the traditional business with final exams on the PwC management board. The 54-year-old has won the internal power struggle, as the Handelsblatt learned from circles close to the management.
However, very tight: In the election that ended on Monday, she got 51 percent of the votes from the more than 600 partners. PwC itself did not want to officially confirm the change at the annual press conference on Tuesday. Reason: The decision is currently still being discussed in the PwC committees before the management addresses itself to the public.
For the largest German auditing and consulting company, it means a turning point: for the first time, a woman will take over management – and she will not take on an easy job. Justenhoven does not only have to drive the growth of the German market leader in examination. It must also unite the partnership that shows a rift with a view to the election result.
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At the start of the program, the allegations of serious tax evasion against PwC will continue to be on the agenda. The prosecutors are investigating eight former and current partners and searched several PwC locations last Tuesday. The fact that this had a decisive influence on the choice is denied in company circles.
Störk underlines success in operational business
What is unusual, however, is that PwC’s partners initiate a change in management in Germany after just four years. Störk, 52, was elected to office in 2018 and was currently standing for re-election. The head of PwC usually remains in office for two four-year periods, as was the case with Störk’s predecessor Norbert Winkeljohann.
It remains to be seen whether some partners are disappointed with the operational development. At the press conference on Tuesday morning, Störk excluded the topic of leadership changes and focused on the results of the 2020/21 financial year, which ended on June 30th.
“We can look back on a very successful financial year,” he said. “The second half of the fiscal year in particular was characterized by strong growth, which is continuing very clearly.” In fact, PwC coped with the 2020/21 pandemic year comparatively well, but uses a special method of calculation when comparing the results.
The reason for this: Overall, the revenues at many consulting firms have fallen because their consultants hardly traveled in the corona year and accordingly billed their customers less travel expenses. This depresses the turnover of the service providers, although the projects have not lost any of their scope.
PwC reports an overall performance for 2020/21 that is supplemented by the sales contribution from travel expenses that was customary in previous years. The pandemic effect is therefore excluded in order to make the development easier to compare. Then PwC comes to a total output of 2.39 billion euros, which corresponds to an increase of 1.5 percent.
Without this adjustment, the company would reach a value of 2.3 billion euros, which corresponds to a slight decrease. However, this is mainly due to the fact that PwC has lost several larger auditor mandates in the course of the legally required rotation.
Consulting divisions are growing
Just submitting the attestation order to Deutsche Bank cost the company a good 60 million euros in sales. The two consulting divisions for tax / legal and management consulting (Advirosry) both grew, even if one takes into account the negative corona effects due to lower travel expenses. On a comparable basis, the advisory area even grew by ten percent.
Overall, PwC is getting out of the pandemic better than competitor Deloitte, for example, which the special effects of the pandemic brought about an eight percent decline in sales. Like PwC, Deloitte underlines that business is currently growing at high double-digit rates.
Internal reasons speak in favor of Störk’s failed re-election. So Störk could not build on the leadership and charisma of his predecessor Winkeljohann, at least in the opinion of his critics in-house. They also accuse him of not keeping the promises made at the start, it is said in the circles.
Störk knew that the majority of the management and the second management level were behind him until the end. But Justenhoven managed to win over the “base” in the election.
The auditor and tax advisor will take up the post of chief on July 1st next year. On the PwC website, on which the current management is presented, Justenhoven can be quoted as saying: “Who, if not us? When, if not now? What if not together? “
In fact, the manager at PwC would not face an easy integration task. Although she won, she received no support from almost half of the partners. It is foreseeable that Justenhoven will comprehensively reorganize the management and that partners in management positions will leave the company.
The manager from the Allgäu has been with PwC for more than 25 years. In 2007 she moved up to the partner ranks and was appointed to the German management team in 2013, where she has headed the Assurance division since 2015.
The cultural kit will not be the only item on the future PwC boss’s agenda. In addition to the company’s operational performance, she is likely to place particular emphasis on the further development of the PwC workforce, especially with a view to reconciling the challenging job of a consultant and auditor with private life.
Justenhoven was “Manager of the Year” in 2017
In 2017, Justenhoven was named “Manager of the Year” with the Mestemacher Prize from the large bakery of the same name. With the award, the company honors top managers who are exemplary in balancing careers and families.
When she takes office, the allegations against PwC for tax evasion will also be acute. The large-scale raid, led by the Frankfurt Public Prosecutor’s Office, caused a great surprise and continued unrest in the workforce. 250 investigators whizzed out and searched the offices and homes of eight PwC managers for two days.
Four of the accused are currently still in the service of the consulting company. The suspicion is of serious tax evasion between 2012 and 2017. This is difficult to reconcile with the self-image of the company, which describes itself as a “responsible taxpayer”. “We complete our tax returns – at home and abroad – with great accuracy, with the best of intentions and on time,” writes PwC on its website.
The finance and law enforcement agencies apparently see it differently. Specifically, PwC is said to have accounted for consulting services provided in Germany through its Swiss sister company. “The inclusion of the Swiss company is said to have served exclusively to conceal the advisory services in Switzerland and thus to evade sales tax,” said the Public Prosecutor’s Office.
The authority puts the volume of potentially evaded taxes at eleven million euros. That is comparatively little money. For PwC, sales tax is only a transitory item anyway. It is charged to the customer and forwarded directly to the tax office. However, this could have given PwC a competitive advantage because the bill was lower than the competition.
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