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KPMG partner pay rises but trails Big Four peers

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KPMG’s partners took home on average £786,000 last year, up from £757,000 a year earlier. But partners’ pay still lags behind their Big Four rivals. 

31st Jan 2024
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The Big Four firm reported that its revenue grew by 9% for the financial year ending 30 September 2023, to £2.96bn with a profit before tax of £364m.

The strong revenue growth also led to an increase in the average partner distribution of £786,000. This is an increase on the pay out reported this time last year, where partners banked £752,000

Partner pay

However, the partner pay ended up being £746,000 and the other £40,000 was allocated to their capital account. At £746,000, KPMG partners took home less than their Big Four cohorts: PwC partners were paid £906,000, EY partners saw pay drop from a record £803,000 to £761,000, while Deloitte partners received the biggest payout of £1.060m.  

KPMG’s revenue growth was mirrored across many of these service lines, with audit seeing the biggest increase of 19%, followed by 8% for tax and legal, and 7% in consulting. However, the Big Four firm’s deal advisory service line revenue decreased by 6%, which KPMG put down to being reflective of market conditions.  

The revenue growth comes after KPMG topped the accountancy watchdog’s table of financial sanctions last year. It received a record fine of £20m over the Carillion and Regenesis audits, where KPMG partners were found to have provided false and misleading information and documents to the Financial Reporting Council. 

People problems

Despite KPMG’s strong revenue growth, profits before tax dropped to £364m, which the firm put down to a 17% increase in staff costs. KPMG said the increase was a result of retaining talent to support market demands, alongside the hiring 2,573 new people. 

The increase in staff costs is being felt across the Big Four firms, with PwC recently revealing plans to offer voluntary redundancy for 500 to 600 people, and KPMG even froze pay for around 12,000 employees.

As of October 2023, KPMG has 833 equity and salaried partners and 17,239 employees.

The increase in revenues has been attributed in part to demand from clients on tax transformation and the use of generative AI from the tax and legal side of the business, and the expansion of reporting requirements led to further growth in the audit practice. 

Due to the rapid rise in generative AI, KPMG highlighted its investment in this technology in the annual report. This includes partnering with Microsoft to give colleagues access to Microsoft 365 Copilot, and piloting Azure OpenAI technologies in the UK for audit, tax and advisory clients. 

Jonathan Holt, chief executive and senior partner of KPMG in the UK, said: “Our people have worked exceptionally hard to deliver strong revenue growth against a challenging economic backdrop. Digitisation and emerging technologies are at the forefront of our clients’ minds, and we have the expertise to meet demand and help them gain a competitive edge. 

“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.” 

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