KPMG will reduce the pay of its partners by 11% to alleviate the impact of the coronavirus pandemic.
The financial services company also expects to downsize a number of its offices including its Canary Wharf headquarters.
KPMG announced today that its profit fell by 6% to £288m from £306m the year before.
The average pay for its partners dropped from £640,000 to £572,000 as job protection remained a priority for the Big Four accounting firm.
KPMG chose not to furlough any members of staff at the height of the pandemic and even continued to hire at all levels of the business. The costs around moving UK staff to home working also took its toll on the company’s balance sheet.
Prior to the lockdowns coming into effect, KPMG was experiencing “high single-digit growth”.
However, many of the firm’s services, including consulting and deals advisory, are now less in demand, as the pandemic takes its toll in the UK economy.
Audit was the only division within the firm to see a revenue increase to £606m, up 3% from the year before.
Bill Michael, senior partner and chair of KPMG, maintained a positive outlook while asserting the company’s commitment to protecting its staff.
“I am more optimistic than I was two months ago but the business is being as prudent as possible and making sure partners take a bigger hit than anyone else. It is about the wellbeing of our staff and our people,” Michael said.
Partners from across the sector have taken similar pay cuts amid the Covid slowdown.
In September of 2020 partner pay at Deloitte fell by 17% despite revenues increasing by 10%. While PwC announced towards the tail end of last year that partners would be taking 10% pay cuts.
Sourced from UK Investor - written by Liam Roche