In an unprecedented move for a consultant, Rob Smith’s £507,000 salary is disclosed – along with 37% profit
Davis Langdon this week became the first consultant to disclose the salary of its senior partner in its end-of-year results.
Rob Smith, the senior partner at Davis Langdon for the past three years, revealed exclusively to Building that he earned £507,000 in the year ended 30 April 2005.
This is the first time ever that a senior partner’s salary has been publicly announced because, unlike listed companies, private firms are not required by law to disclose remuneration details.
The results are the first since Davis Langdon became a limited liability partnership in February last year.
The average profit share paid out to members, who are partners with a stake in the company, was £173,000.
Turnover at Davis Langdon’s European and Middle East business, which employs 1400 out of a total of 3000 staff and is run by Smith, exceeded the £100m mark for the first time. The £106m turnover is an increase of more than 18%.
At first glance, profit at Davis Langdon rose by almost 100% in its first year as an LLP, from £13m to £25m. However, because most partners opted to take a stake in the partnership, their salaries were no longer included as an employment cost within the figures. The actual rise in profit was 37%.
While it was a traditional partnership, Davis Langdon had 60 equity partners and about 100 salaried partners. Now, 150 partners have a stake in the company, which is more than 10% of the total staff in Europe and the Middle East. No partner has more than a 2% stake.
The rationale behind the switch to LLP status was to cap the amount for which partners would be personally liable if a project went wrong.
Smith told Building: “These are good figures because we have taken market share and it was a good period for the industry, too. There will be good and bad years and one of the benefits of making the firm more accountable as an LLP is that it makes us more transparent and our staff more passionate. We can’t just slide our results into Companies House.”
EC Harris was the first consultant to become an LLP in late 2003. It revealed that it paid its chairman Richard Clare £405,000 for the year ended 30 April 2004, a figure not previously published in the media. It reported a £15m pre-tax profit for the period.