By John Ikani
KPMG UK’s partners saw a significant rise in their paychecks last year, as the company reaped the rewards of a surge in dealmaking.
The Big Four firm reported a 16% boost in fee income to £2.72bn, but profits only rose 3% to £449mn, weighed down by fines and rising expenses.
The average partner pay was £717,000, lagging behind rival firms Deloitte and PwC, who paid partners over £1mn, and EY with £803,000.
£40,000 of partner pay was held back, with KPMG still facing potential regulatory fines, but CEO Jon Holt stated the move was “not connected” to increased provisions for future fines and legal claims.
The company’s profits also took a hit from rising wages, as a £132mn increase in the annual wage bill resulted from staff raises and investments in hiring and technology.
KPMG’s deal advisory practice saw sales soar 24% to £443mn, while consulting and audit practices boosted revenues by 22% and 10%, respectively.
Despite EY’s plans to spin off its consulting arm, KPMG’s CEO emphasized the strength of combining audit and advisory services, claiming that breaking up the business wouldn’t improve audit quality and the “multidisciplinary” model offers diverse career paths and better problem-solving abilities for clients.
Regardless of a slowdown in deal activity, CEO Holt noted “unabated” demand for consulting, tax, legal, and audit services.
Holt earned £2.7mn in his first full financial year as KPMG faces ongoing regulatory probes and lawsuits stemming from years of problems in its audit division.
The company was fined £7.5mn for its audits of Rolls-Royce, Conviviality, and Revolution Bars, and paid £5mn to settle a negligence claim.
It remains under investigation for its audits of Eddie Stobart Logistics and the collapsed Carillion, also defending a £1.3bn legal claim by Carillion’s liquidators.
KPMG has resumed bidding for government contracts after temporarily halting pitches in December 2021 following a threat of an outright ban by Whitehall officials.
