KPMG boosts partner's pay to pounds 770,000
Tuesday 04 February 1997
The package was made up of "executive remuneration" of just under pounds 469,000, compared with last year's pounds 438,000, for doing the job of senior partner, unchanged pension contributions of pounds 125,000 and a slightly lower "proprietorship profit" of pounds 176,572. Though Mr Sharman has this month taken over as chairman of the 77,000-employee, $8.1bn (pounds 5bn)-turnover international firm, he will not be paid extra for that.
One other partner received executive remuneration of between pounds 375,000 and pounds 400,000 and five others received between pounds 300,000 and pounds 350,000.
The firm's pre-tax profits rose from pounds 17.9m to pounds 24m and the average pay package for each of the firm's 560-odd partners rose 12 per cent from pounds 184,000 to pounds 206,000. This gain compares with a rise in gross fees of just 6 per cent to pounds 624m.
The firm said its improved profitability had come about through improving the ways in which it did its work and reducing infrastructure costs. In particular, more professional managers had been employed to enable professional staff to concentrate on earning fees. At the same time, the board of the firm, headed by Mr Sharman, had been refocused on setting and overseeing strategy rather than running the 8,500-strong organisation.
Mr Sharman said: "This has been a year of growth combined with considerable investment for the UK firm. We have taken major strides to improve the quality and scope of skills our people provide and enhance our information technology capabilities."
He said the current year had started well, with earned income about 15 per cent ahead. "We are optimistic for the coming 12 months," he said.
Management consulting suffered a difficult year and, after a poor opening period, was redirected to capitalise on the changing economic environment, Mr Sharman said. But, though corporate recovery had also been static, other services had seen strong growth.
Corporate finance rose 41 per cent to pounds 29m, tax lifted revenues 9 per cent to pounds 130m and the audit and accounting division, responsible for 38 per cent of fees, rose 5 per cent to pounds 258m.
KPMG, which in 1996 led the way for accountancy firms disclosing financial information, broke new ground by announcing that the results were the first in the sector to be audited, by middle-tier firm Grant Thornton. Though it was prompted to publish figures by its decision to turn its audit arm into a corporate entity in order to give itself greater protection against huge negligence suits, the firm now sees a growing trend towards openness. As a result, it is proposing to the accountancy professional bodies and the Accounting Standards Board the establishment of guidelines for reporting by non-corporate bodies.
The firm, which has picked up such audit clients as retail and pools group Littlewoods and law firm Clifford Chance, is taking part in an international KPMG programme designed to enhance the audit process by adding business risk assessment, performance analysis and other features to the statutory process.
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