Tough times are biting at KPMG, where trainees who pass their exams first time this year will not be receiving their traditional £1,000 bonuses, reported City A.M.
An email seen by the paper from KPMG chief operating office Adrian Stone headed “First Time Pass Bonus” informed the unfortunate trainees of the news last Wednesday.
“As you may be aware, our trading performance in the audit function has come under significant pressure from the challenging economic situation we are experiencing in the UK,” Stone wrote.
“As a result of this KPMG will be exercising its discretion under the training agreement and with immediate effect a discretionary bonus will not be paid this year to acknowledge achievement of first time passes in professional exams.”
The bonus cutback reflects the increasing pressure on audit margins throughout the profession. In January KPMG’s European results showed the UK practice grew its fee income 7% to £1.7bn in the year to 30 September 2011, but this was driven primarily by growth in risk and tax consulting work.
UK profits fell 5% to £396m, with a resulting drop £80,000 drop in the per partner profit figure of £683,000, due in part to weak audit work levels and a lull in M&A activity.
The management email asked for trainees’ understanding of the need to balance the interests of different team members and said the bonus might be reinstated if the firm hits its budget contribution for the full year.
A disgruntled trainee told City A.M., “The feeling amongst staff is that the senior leadership appear increasingly out of touch from those in the lower grades.”