KPMG Australia partners and staff enjoy bonus windfall
Following strong performance in its latest financial year, KPMG’s partners and staff are bracing themselves for a much higher than expected bonus – in some cases double the bonus they previously anticipated.
Despite the impact of the Covid-19 pandemic, KPMG Australia closed its 2020/21 financial year (from June 2020 to June 2021) in style, lifting its revenues by 6 per cent to narrowly crack the $2 billion revenue mark. Australia chief executive Andrew Yates, who took over as CEO at the start of July, said the result was a “remarkably strong performance” driven by “a significant pickup in business confidence across the Australian economy”.
The Management Consulting division was the firm’s star performer, with revenue increasing by 12.5 per cent to $629 million as clients ramped up their use of consultants to help them with adapting to the pandemic-environment, and more recently, with preparing for the post-Covid-19 world.
”The consulting parts of our practice have had a good year. I think that’s really reflective of the increase in confidence, as the year has gone on, of our clients, in particular around the transformation of their businesses.... Also I think it’s been reflective of their willingness to look at the longer term,” Yates said.
The Audit, Assurance & Risk Consulting division was the next biggest contributor, bringing in $590 million, while the Deals, Tax & Legal department delivered close to $450 million in revenues despite a small contraction. The last of its four major businesses – Enterprise – grew modestly to $243 million.
With revenues on the up, and costs down (mainly due to lower project and travel expenses), profits spiked, with KPMG’s 604 partners across the country (around 30% of which are women) enjoying a 17 per cent increase in their annual partner profits. According to salary data from Glassdoor and AFR, the starting income for a KPMG partner is around $300,000, with that number usually rising to more than $700,000 for more senior partners.
On average, KPMG’s partners pay a tax rate on profits of 38 per cent, which is below the 39 per cent average tax rate for Australians earning more than $180,000 a year.
As a result of the higher profits, the year-end bonus pool for staff will be double what was budgeted at the start of the year, confirmed Yates. “Twelve months ago, we were unsure as to what was going to happen. The increased bonus is part of how we are sharing back with our people,” he said.
Staff advisory group
Looking ahead, KPMG also announced that it will create a 16-strong staff advisory group with the aim of improving the connection between partners and the firm’s 8,100 staff. The group will consist of members of staff from different functions and levels from all around the country, “to make sure that I can listen and hear directly from people about how they’re feeling in the business,” explained Yates.
KPMG is one of the world’s Big Four accounting and consulting firms. Combined, the quartet generate revenues of over $9 billion in Australia.
