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Payouts for UK partners at KPMG climbed 4 per cent to an average of £746,000 last year despite a surge in fines for audit failures and a slowdown in growth.
The accounting and consulting firm reported a 9 per cent jump in revenues to £2.96bn during the year to September, compared with growth of 16 per cent in the previous 12 months.
Pre-tax profits fell nearly a fifth to £364mn, with the firm blaming higher staff costs. However, a cull in the firm’s senior ranks meant partners’ average individual payouts rose. The number of UK equity partners, who share in the firm’s profits, fell 7 per cent in the year to October to 467, the lowest level in more than 20 years.
The firm was hit with three regulatory fines during its latest financial year, worth £2.8mn, as well as a record £23mn penalty in October for “textbook” failures in its auditing of outsourcer Carillion.
Despite fines and weaker growth, average partner pay at the firm jumped to an average £786,000, from £757,000 a year earlier. However partners took home an average of £746,000, as £40,000 was held back. The same amount was also held back in the year to September 2022, leaving partners with average payouts of £717,000.
Despite the jump, KPMG partners remained the lowest paid of the Big Four last year. EY handed partners an average of £761,000, while PwC and Deloitte paid out £906,000 and £1.06mn respectively.
The rise in average partner pay comes after KPMG launched a fresh round of job cuts and froze pay for about 12,000 employees in the UK last year amid a difficult economic environment.
In a statement on Tuesday, Jon Holt, chief executive and senior partner of KPMG UK, said: “Our people have worked exceptionally hard to deliver strong revenue growth against a challenging economic backdrop.
“I am confident that our long-term strategy is delivering and putting the right foundations in place to transform the business for future, sustainable growth.”
Like its rivals, KPMG has been forced to contend with higher costs and waning demand for some of its services against a gloomy economic backdrop.
Revenues in the firm’s deals advisory and consulting arms rose 6 per cent and 7 per cent respectively, while the firm’s audit division drove revenue growth with a jump of 19 per cent.
Holt is seeking to repair KPMG’s reputation and boost profits, which have lagged behind rivals. The firm, which is the smallest of the Big Four with about 17,000 staff, has long trailed its competitors on average partner pay.
