Large company accounts are works of fiction
KPMG to provide $33k to the Griffith Tax Clinic
The big four company announced it will provide the Griffith Tax Clinic with $33,000 in funding to supplement critical community work.
PwC’s tax-leaking wrecking ball swung into his firm, but it’s the second-order damage that means things will never be quite the same in the professional services game.
Take the recent necessary and embarrassing public discourse about the take-home pay of its top strivers. Particularly those exposed to advising government and lining their pockets with taxpayer dollars. Some are doing better than others in opening the kimono.
This month, KPMG put out its 2024 Impact Plan. It’s one for the true-believers, running to some 76 pages, full of wise-sounding jargon and vague ambition. But on page 22, the firm proudly announces it’s the “first Australian Big 4 partnership” to promise to publish executive pay every year. It’s anonymised and in bands, but baby steps. Good for KPMG.
That’s except the chief executive’s pay. KPMG’s report shows Andrew Yates took home $2.47 million in FY23 and $2.44m in FY24.
If only that was the whole story. The word kicking around the top levels of the firm is that the Yates pay included an $800,000 bonus. This was tied to a long-term incentive agreement spread out from 2022 to 2024. KPMG declined to comment.
The rest of the equity partners at the firm (as outlined in the report) took an average 9 per cent pay cut.
No one would resent a CEO nailing his targets. However, if one were to pause to consider the 18 months that Yates had, it’s worth asking: what does a good year look like?
The firms revenues fell 3.6 per cent, pulled down by the once-marquee consulting business which fell 14 per cent. That’s part of a sector-wide downturn. But the firm’s soggy results mean some of its senior directors and associates are seeing their pay struggle to keep pace with inflation. It’s also done away with more than 200 roles. How will KPMG’s all-nighter troops feel knowing the CEO’s still in his bonus era?
Before considering his embarrassing public showing. Yates was the man who denied that KPMG ever power-mapped – a standard industry practice of ranking officials according to their warmth to a firm – while looking up at Barbara Pocock holding a power-map with a KPMG logo on it.
If that wasn’t bad enough, rather than cop it on the chin, send in a sorry note with “whoops my bad, Barb”, Yates and KPMG doubled down. Again and again.
It was only on the sixth go (and after Deb O’Neill’s iconic admonishment that “you must think we’re absolutely stupid”) that Yates owned up in February this year, grovelling in an opening statement: “We took too literal an approach to our response.” You think!
This is the horrifying realisation from the sittings in the Senate star chamber: these are supposed to be the hyper-intelligent guns-for-hire to whom government departments turn to fill the gaps they can’t. And these are the soft-touch skills of their bonus-deserving leader.