KPMG pay plunges after firm suffers write-off costs
Partners at KPMG UK will see their average pay fall from £582,000 to £519,000 after the Big Four firm endured a host of write-offs on investments, largely in technology ventures.
Although it saw UK billings rise 5%, after the one-off hits, pre-tax profits fell 19.5% to £301 million in the past year.
New chairman Bill Michael replaced Simon Collins during the year and has quickly decided to stop a host of investments in largely tech-related ventures.
Examples include a joint venture with software firm Flexeye which it backed only two years ago and is now scrapping, writing off its £2.6 million investment.
Though it continues to back technology related to audit and accounting, Michael appears to be focusing the firm more on its core functions. He said that although its core audit and consulting arms had achieved double-digit growth, “we also took some tough decisions, writing down our stake in a selection of historic investments where performance has not met expectations.”
Audit revenues jumped 10% in a year in which KPMG won the audits of BT, L&G and Micro Focus.
The firm was controversially cleared by the Financial Reporting Council of failings in its audit of HBOS before the bank’s near collapse in 2008 but is now being investigated for its work for Rolls-Royce. It denies wrongdoing.
The chairman’s post commanded a £1.4 million salary in the year.