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The accounting giant KPMG has paid its 582 UK partners an average of £572,000 each in the middle of the Covid crisis.
Thesubstantial payouts are just 11% lower than the £640,000 average pay that each partner took home for 2019. KPMG’s UK chairman, Bill Michael, collected £1.7m, down 14% from the near-£2m he was granted a year earlier.
The pay cuts came as the firm revealed a 6% drop in annual underlying profits to £288m, saying it suffered weaker demand for consulting and advisory services at the start of the pandemic. KPMG said the pay cuts were necessary to “protect jobs and support employees.”
The High Pay Centre thinktank said remuneration levels at KPMG were still extreme when compared with the salaries of regular UK workers, particularly those who faced financial hardship during the Covid outbreak.
“While it is welcome that KPMG have cut pay for their partners, the scale of these packages are still unimaginably high for the vast majority of British people, many of whom would have to work decades to earn these sums,” said Andrew Speke, a spokesman for the High Pay Centre.
“Given the hardships many people have faced this year and warnings from the chancellor of tough days ahead, we hope that KPMG will use these cuts to ensure the incomes of staff on lower salaries are protected,” he added.
The rival accountancy firm BDO came under fire in December for paying its 264 partners an average of £518,000 each, while refusing to repay £4.5m in furlough money that it said kept 700 staff on its payroll.
BDO’s managing partner, Paul Eagland, said there had been a “moral debate” about returning the furlough cash, but decided there was a greater responsibility to protect jobs. However, it did a U-turn just days later, after being widely criticised and “recognising the public mood”.
KPMG is one of the so-called big four accounting giants, and the other three have also continued to hand out huge pay packets, even after cuts. In October, Deloitte, said partners would be handed an average £731,000 for 2020, despite cutting pay by 17%. EY only shaved 1.8% of average pay to £667,000, and PwC’s partners took home £685,000 after a 10% cut.
KPMG UK said it had not furloughed any staff or tapped government Covid loans during the crisis. However, it did cut 200 jobs at the start of the pandemic due to a drop in demand for its consulting and advising services.
The firm, which had 15,776 staff as of October, has since launched a recruitment drive, taking on 900 graduates and apprentices and 950 other “experienced hires” following a pick-up in business.
Michael said: “Our first quarter’s performance has been positive and our sales pipeline is strong. The [merger and acquisition] market has resurged, and clients are resuming discretionary projects as they adapt to the changes the pandemic has brought both to their business and market.”
Source: The Guardian
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