KPMG's Rake collects £3m despite tax scandal

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The Independent Online

Mike Rake, the chairman of KPMG's international business and senior UK partner, was paid more than £3m in salary and bonuses last year, in spite of heading the firm at the time it was hit with an embarrassing $650m (£375m) bill for its role in a US tax shelter scandal.

Mr Rake, 58, who is due to step down from his position as senior UK partner in September, received just over £600,000 for his role as head of the international group, and a further £2.4m for his UK position.

Although his £602,000 chairman's salary was frozen at the same level as that he received in 2004, Mr Rake's UK pay soared by 19 per cent, compared with an increase in average staff pay of 11 per cent.

The payouts, which were revealed in the firm's annual report, published yesterday, came on the back of a bumper year for the group, which saw its profits rise by some 21 per cent to £305m.

KPMG paid £375m in compensation and fines in September, after settling with the American Department of Justice over allegations of selling illegal tax shelters to wealthy individuals in the late 1990s.

Commenting on Mr Rake's pay, a spokesman for the group said yesterday: "We've had a very good year. Profits are up 21 per cent and the staff have also enjoyed the benefits. Bonuses totalled £59m for staff this year, compared to £37m the year before. So it's not as if one person alone is enjoying the benefits."

KPMG, like its main global competitors, has seen a strong boost in business over the past two years due to a wave of new accounting directives to come out of both the United States and the European Union.

Mr Rake is to stay on as chairman of the international division when he quits his UK position this autumn. John Griffith-Jones, the UK chief executive, is widely expected to succeed him as senior partner in the UK.

Commenting on the company's positive results, Mr Rake said: "In many ways, 2005 was the most successful year in the history of the UK firm. Our growth of 20 per cent makes KPMG the fastest-growing 'Big Four' firm in the UK in 2005 - and vindicates our strategy to invest at a time when the economic environment was less promising."

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