CEO Scott Hartz. Tom O’Neill, who recently replaced Hartz, was selected in large part because of the success he had in bringing together distant firms into a strong national practice in Canada. The India partnership is among the country practices that might not join PwC Consulting. Given the importance that India is playing in offering offshore support for business process services, fail- ure to bring India onboard could be detri- mental. Developing business process serv- (continued on page 11) G L O B A L N E W S PWC’S LARGEST REGION EXPERIENCED BIGGEST DROP IN MARGINS FY00 NET FY01 NET ONE-YEAR FY00 FY01 SIX MONTHS ENDING 12/31/01 REVENUE REVENUE REVENUE GROSS GROSS REVENUE REVENUE GROSS ($000) ($000L) GROWTH MARGIN MARGIN ($000) GROWTH MARGIN North America $3,253 $3,116 -4% 43% 33% $1,312 -16% 34% EMEA $2,005 $2,120 6% 41% 43% $1,032 3% 36% Asia Pacific $425 $4,980 17% 34% 33% $2,462 -3% 34% South America $132 $112 -15% 40% 33% $47 -14% 29% Total $5,790 $5,965 3% $40 $36 $2,675 -9% 35% Source: PricewaterhouseCoopers Consulting
Global IT Consulting Report, May 2002. ©Copyright Kennedy Information, Inc., 800-531-0007. All Rights Reserved. Reproduction prohibited by law. 11 PwC faces challenging transformation to public company (continued from page 10) ices will be a priority to generate stable revenues, PwC officials tell us. Public ownership changes partners compensation Because PwC partners will receive stock compensation, their actual cash compensation will decline. The aver- age partner should expect to take home 20% less cash, ranging generally from 5% to 30% for most partners and from 30% to 50% for executive officers. Given the importance of stock owner- ship, it will be interesting to see whether investors pressure PwC to make sales re- strictions a little less generous to em- ployees. Accenture has a more restrictive schedule and has performed well, but faced criticism when it moved up by three months the first sale of stock held by employees. Like Accenture and KPMG Con- sulting, limits will be placed on the sales of common shares held by PwC Consulting employees. For each of the first three years, 20% of the shares may be sold. In the fourth year, 15% may be sold, and the remaining 25% may be sold subsequently. PwC Consulting expects to begin trading shares in August. Between now and then, it’ll have to provide additional information to the SEC, including its valuation and what percentage of the firm it plans to sell. New AMS CEO, Alfred Mocket, re- cently put his credibility on the line by repeatedly telling analysts there will be “no further deterioration” from the firm’s telecommunications practice. The practice has shrunk 52% compared to last year. Mocket, a former British Telecom ex- ecutive, is putting his new management team in a spot where there will be little wiggle room if Q2 results don’t back up the tough talk. The leader of a peer con- sultancy with a struggling telecommu- nications practice said he’d advise Mocket to lower analysts’ expectations of AMS’ core practice. The executive was less optimistic about his own prac- tice’s prospects in Q2. Given that no other major IT con- sulting firm is predicting any significant improvement for telecommunications
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