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KPMG will repay staff a portion of their 20 per cent pay cuts after performing better than expected during the COVID-19 crisis.
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KPMG repays COVID-19 pay cuts on the back of solid FY20 results
23 June 2020
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9 minute read
In an update to KPMG’s 9,000-strong workforce on Tuesday, chief executive Gary Wingrove announced that the firm would repay a portion of its COVID-19 pay cuts — about 1 per cent of the expected 6.7 per cent annualised pay cut.
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In early April, the big four firm announced that staff would see 20 per cent pay cut for four months running from May to August, with equity partners seeing a 36 per cent reduction.
“This performance in the last three months of FY20 means we are pleased to be able to repay one-third of employee salary reductions in May and June 2020. For the majority of people, this repayment will represent 1 per cent of their annual salary,” Mr Wingrove said.
The repayments will not be applied to partners or executive directors, according to Mr Wingrove.
Mr Wingrove also noted that the firm could not guarantee further paybacks for July and August, given the uncertain economic outlook and the looming threat around “the cliff” when government support ends in September.
The announcement comes as KPMG finalises its financial results for the year, with the firm expecting an anticipated 8 per cent revenue growth for FY20, despite the COVID-19-induced downturn.
In 2019, the firm posted a 9 per cent increase in revenue to $1.78 billion.
Mr Wingrove pinned the better than expected performance down to the easing of restrictions at a greater rate and breadth than it had anticipated.
“The financial and economic effects of COVID-19 are still impacting our clients and our business. However, we have performed slightly better during these COVID months than expected, and within the thresholds we set in our plans to protect our firm during the pandemic,” Mr Wingrove said.
“While it’s too early to be definitive, I can say we do expect to generate some year-on-year revenue growth for FY20.
“However, it is inevitable we will fall well short of the growth projections laid out in our plan at the start of the year, even though we built up the resources to deliver that growth and more, which of course has a flow-through impact on profit.”
KPMG’s move comes after rival firm Deloitte announced the largest redundancy program across the big four on Monday, cutting 7 per cent — or 700 roles — of its over 10,000-strong workforce, despite growing its revenue take by 10 per cent.
Fellow big four PwC had also recently announced 400 redundancies, approximately 5 per cent of the firm’s 8,000-strong workforce.
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