Big Four accountant KPMG has prevented British part-ners sharing the whole of the year's profit for "the first time in living memory", according to the number-cruncher's UK chairman.
More than £20m has been held back for investment, primarily in technology, out of a profit of £455m, itself a leap of 27 per cent on last year. KPMG was able to withhold part of the pot as average pay for the 583 partners was considerably higher this year at £713,000, after a disappointing 2012 that saw them pocket £580,000 each.
Simon Collins, who took home more than £2.4m, told The Independent: "We've always distributed 100 per cent of earnings – if I'd tried to have done this last year when profit was tight I'd have been lynched. I'd like this to become a way of life for us as it's only fair to the next generation."
The money will be used in areas like cyber security and hi-tech software to help clients with their human resources management. The bean-counter has been hot on technology of late – Mr Collins describes this as the "golden thread" running through KPMG – having launched a $100m fund last month to invest in data and analytics businesses.
Although KPMG's profit was up, turnover remained broadly flat at £1.8bn. This kept the group firmly in third place, just ahead of EY but behind PricewaterhouseCoopers (PwC) on £2.7bn and Deloitte with £2.5bn. However, Mr Collins said that KPMG had been "rebuilt financially to build a platform to invest", which last year involved cutting about three per cent of its UK workforce.
These savage cuts were privately criticised by some KPMG alumni, but Mr Collins insisted that the bus- iness was now in "full-on growing mode".
He added that KPMG will be "long-term winners" out of huge changes to the audit market that have been imposed by the Competition Commission.
The regulator has demanded that listed companies put the role of auditor out to tender on a regular basis, smashing what has been perceived to be an overly cosy relationship that can see auditors in place for decades without challenge.
KPMG has picked up some big-name new clients, including consumer goods giant Unilever, housebuilder Berkeley and insurer RSA.
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