KPMG's Rake progresses up pay ladder

The head of KPMG last year became one of the best-paid accountants - and among the best-paid executives in the City - earning £2.4m.

Mike Rake's total pay package surged 45 per cent in 2003 at a time when his firm was still feeling the pinch from companies cutting back on tax and other advisory work. It included £1.65m in basic pay, plus £170,000 from a share of profits on property asset sales.

The sum - which dwarfed the pay of most rivals at the so-called Big Four firms - reflected the fact that Mr Rake is the only individual to head both the UK arm of the one of the major accountancy firms and also the international business. Mr Rake was paid £602,000 for his chairmanship of KPMG's international arm, taking the total to £2.4m.

The reward came at a time when KPMG, in common with its rivals, retrenched in some areas to take account of subdued demand for corporate finance and advisory work.

Average profits payments for partners rose by 13 per cent to £449,500.

KPMG said its UK firm made operating profits of £233m, up 10 per cent, on revenues of just over £1bn. Revenues were slightly lower than in 2002. Fuelled by an increased desire to ensure compliance in the post-Enron crackdown by US and UK regulators, audit work generated £291m in fee income, up 9 per cent on 2002.

Mr Rake's salary was ahead of Keiron Poynter at PricewaterhouseCoopers, who received just over £2m last year. He was paid nearly twice as much as his counterpart at Ernst & Young, Nick Land, who took home £1.3m.

The other Big Four accountant, Deloitte & Touche, has not disclosed the pay package of its chief executive, John Connolly, but he is thought to have received more than £2m last year. Mr Connolly has faced calls for his resignation in recent days after The Independent revealed he was at the centre of the Barlow Clowes scandal in the late 1980s.