Wednesday, July 19, 2023

Adam Powick, Deloitte’s chocolate teapot

Calls for royal commission as PwC, Deloitte scandals widen

 Former PwC partner resigns from Board of Taxation

EY insists it is nothing like competitor PwC, fighting calls for 'big four' to be broken up

Adam Powick, Deloitte’s chocolate teapot

Joe AstonColumnist

“Are you really worth seven times the salary of the Australian prime minister?” came the opening question from Labor Senator Deb O’Neill to Deloitte chief executive Adam Powick at the parliamentary inquiry into consulting firms on Monday.

Powick offered some scarce resistance, mumbling a feeble protestation that it’s “a hard argument to prosecute”. But asked a second time, he crumbled, responding, with defeated brevity, “No.”

Let’s just back up here for a moment. This guy is paid $3.5 million to lead an organisation employing 13,500 people and generating $2.5 billion of annual revenue. In the days before this hearing, he’s presumably endured hours of practice interrogation by his army of PR people.

And at the first pulse of cognitive pressure, the first inkling of heat, he folds in a heap, melts into a puddle like a chocolate teapot.

How did Powick go on Tuesday morning, on day two of his epiphany? He sat up in bed and rubbed his eyes, then stumbled into the kitchen, nodded at the butler, waved at the pool boy. On the way out, he slipped a lobster to the bloke polishing his car. Catching his own eye in the rear-vision mirror as he swept down his rambling driveway, he whispered to himself, “I don’t deserve this.”

Poor Adam is living a lie – and it was all too easy to extract his confession!

These big four bosses are supposed to look like Gavin Newsom – all slick hair, blinding smiles and elegant mohair silhouettes. On Monday, Powick resembled a nightclub bouncer, or a garbo at a cousin’s wedding. The furrows in his brow are inches deep. It may be all that guilt and shame he’s carrying around about having a salary you could mistake for a telephone number.

“Who cares what I’m paid compared to the PM?” Powick should have said, right out of the gate. Since when has that been any yardstick for private sector CEOs?

Incidentally, the PM’s $564,000 salary doesn’t account for his two luxury residences, two private jets and more than 50 personal staff. Humble Adam almost always flies commercial and pays his chef and full-time gardener out of his after-tax income!

Powick should have said: “I provide tens of millions of dollars of value to my clients over the course of the year and I make no apology for receiving my fair share.” This would have been the smart answer. The old L’Oréal defence: “Because I’m worth it.”

“I also stop the firm doing stupid stuff that would cost us tens of millions of dollars a year, unlike the revolving door of donkeys running PwC.”

Adam, mate, there’s more where these lines came from – I’m available any time.

As his inquisition continued, Powick did pick himself up off the mat and grasp for a plausible explanation. “I don’t set my salary, never have set my salary, and my salary is set to be commensurate with others that play a similar role in our profession.”

Externalisation, that flimsy reed! I’m not worth it, but they made me take it. I’m doing a community service, I’m taking one for the whole firm – for the entire industry – by chowing down $10,000 every single day of the year (including weekends, because I work hard at the footy and at partners’ conferences). It’s not a lot, really, for turning up. Don’t you know what I’m going through for you?

Powick is getting paid like a KC, like he’s Allan Myers appearing in the High Court if the High Court never adjourned.

He’s the Linda Evangelista of professional services. He doesn’t get out of bed for less than ten grand a day, and if he did, he wouldn’t have a premium brand!

You wouldn’t buy anything from a real estate agent with a rusted out Corolla. You want them all spivvy and schmick, rolling up in their leased Porsche. You just do. That is how the world works, how this nation continues to function.

At its heart, Powick’s rationale for the market-based salary he’s being force-fed is just a reskinning of the old economic theory of conspicuous consumption. Powick is a Gucci handkerchief. He is an economic good whose price bears no resemblance to his value. This can be extrapolated to the Deloitte partnership. The value it produces is dubious, but by charging immense fees it creates the perception of value.

Powick has let the team down badly by betraying his deep insecurity about his output, and by extension the firm’s. He’s momentarily unmasked the nagging doubt he feels about charging the Australian Public Service $350 an hour for his pimply 24-year-old graduates to spritz up their PowerPoint presentations.

Powick knows the big four have been taking the piss and, under oath before the duly elected executioners of his business model, he has some inkling that it’s over.

Joe Aston has helmed The Australian Financial Review's Rear Window column since 2012. He is based in Sydney. Connect with Joe on Facebook and Twitter.Email Joe at