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Evening Standard
Evening Standard
Business
Oscar Williams-Grut

KPMG UK partner pay jumps 20% to £688,000 thanks to ‘hottest deal market ever’

KPMG’s logo

(Picture: Getty Images)

KPMG’s 571 UK partners saw their pay jump by 20% last year thanks to “possibly the hottest deal market ever”.

Average partner pay leapt to £688,000 as revenues and profits climbed. It puts executive pay £48,000 above pre-pandemic levels. Partners took an 11% pay cut in 2020 to protect jobs.

KPMG UK today announced what it called a “market leading” £100 million bonus pool for its 14,700 UK staff to share.

The payouts came on the back of bumper demand for KPMG’s advice on deals. Income at its deal advisory practice rose 31%, the biggest increase across the company’s four divisions. The partnership advised on ProCook’s IPO and Halford’s acquisition of National Tyres, among many others.

Chief executive John Holt told the Standard: “We’ve gone through possibly the hottest deal market ever, particularly driven by private equity cash trying to find a home and overseas investors looking at British assets.

“If you look forward for the next three to six months, it still looks like a hot market.”

Deals worth $363.7 billion were announced globally in January, according to Refinitiv, 28% more than last year and the third highest total in that month ever.

KPMG’s profits rose 51% to £436 million in the 12 months to the end of September, helped by lower levels of business travel as well as healthy margins on advisory work. Revenue rose 10% to £2.35 billion.

Pent-up appetite for corporate deal making has benefited professional services firms across the City, with banks and law firms also reporting booming activity. KPMG’s rivals PwC and EY both paid partners record amounts last year, while Deloitte’s executives saw their annual pay rise above £1 million thanks to a one-off windfall from a disposal.

While the share of profits distributed to partners jumped, KPMG’s payout was the lowest among the “Big Four” accountants.

KPMG’s executive pay would have been higher but partners voted to redirect £300 million of profits to investment. The cash will go towards growth areas such as ESG and law advisory, hiring more tax and deal advisors, and bulking up the firm’s fast-growing digital transformation arm.

Rising demand for KPMG’s services last year came despite a turbulent period for the business. KPMG UK’s chief executive Bill Michaels was forced to resign in February after outcry about comments made during an internal meeting. Michaels told staff to “stop moaning” about the pandemic.

Holt, who was parachuted in after Michaels’ departure, said today: “We always work very hard in terms of our culture.”

He said KPMG had put its people first during the pandemic, pointing to a special programme of unlimited leave for staffers who needed to support their families. He said: “I’m very proud of how hard our people worked during the pandemic.”

KPMG continues to be impacted by historic issues, including its work on collapsed outsourcer Carillion. A tribunal involving former staff is ongoing.

KPMG was fined £13 million last August for its work on the sale of mattress maker Silentnight in 2011 and fined £3 million last month for poor quality audits on the accounts of now collapsed Conviviality.

KPMG ruled itself out of bidding on new government contracts in December after the Cabinet Office threatened a ban. Holt said the company constantly invested in its audit practice and was “working with them to demonstrate the progress made.”

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