KPMG partners take 11 per cent pay cut as Covid-19 eats into profits
Partners at KPMG have had their pay cut by an average of 11 per cent, from some £640,000 to £572,000, as Covid-19 hit profits and revenue at the firm.
KPMG’s chairman was paid £1.7m for the year, a decrease of 14 per cent on 2019.
Partners across Big Four firms saw pay cuts in 2020, driven by coronavirus.
Deloitte partners saw a 17 per cent cut, taking their distributable profits to £731,000, and PwC partners saw a cut of 10 per cent to their earnings, taking their profit per partner to £685,000.
EY partners lucked out, with a cut of just 1.8 per cent, taking their distributable profits to £667,000.
For the financial year ended 30 September 2020, KPMG saw a revenue decrease of four per cent to £2.3bn. KPMG said the drop was driven in part by the sale of its pensions business, which complete in March 2020. Excluding that, it said, revenues would have dipped just two per cent.
Underlying profit decreased by six per cent year on year, from £307m to £288m, as a result of the pandemic on the second half of the financial year.
The firm’s audit practice posted three per cent year-on-year growth in net sales to £606m, while the tax and legal team saw sales fall six per cent to £373m.
Net sales in the consulting practice and deal advisory practice both saw a decrease of two per cent to £574m and £400m respectively.
Future hybrid working
All staff worked remotely during the pandemic, and the firm introduced a special leave code that enabled its people to take unlimited paid time off to care for family and friends during the pandemic. KPMG did not furlough staff nor access government Covid-19 loans.
The firm hired more than 900 graduates and apprentices, with nearly half (46%) located outside of London. It also made 950 experienced hires.
The business plans to spend £44m in 2021 to prepare for a future of hybrid working, and will invest in transforming its offices and in new home working technology.
Office space will be repurposed to be prioritised for meetings, presentations and for staff to meet with one another.