KPMG pays back staff who took 20 per cent pay cut in Covid-19 crisis

Staff who took a 20 per cent salary cut amid the depths of the Covid-19 pandemic will have the lost money repaid.

KPMG CEO Gary Wingrove. Picture: John Appleyard

KPMG staff who took a temporary 20 per cent pay cut last year to help the big accounting firm through the crisis of COVID-19 learnt on Wednesday that they will get their money back.

At a “town hall” meeting CEO Gary Wingrove told staff — who were last December repaid 50 per cent of money foregone in the financial year of 2020-21 — that they would now get the remaining 50 per cent.

The catch-up pay, which will land with employees in March, relates to pay lost in July and August last year.

The 20 per cent COVID-19 cut began in May 2020 and ended four months later.

KPMG last year paid back 30 per cent of the pay lost in May and June and returned employees to 100 per cent of their base pay on September 1.

Mr Wingrove told the meeting that the payback announced today was in response to “stronger than expected — although not yet pre-COVID-19 — first-half performance”.

He said that while performance was strong — 2.7 per cent above the 2021 financial year plan — the firm’s year-on-year revenue remained flat.

“I’m pleased to say we have maintained the momentum generated in the first half of the year, when the market started to shrug off some of the impact of COVID-19,” he said. “But clearly, the external environment is still fragile.”

KPMG’s priority was returning salary lost to people in July and August.

As well as the 50 per cent to be paid in March, there would be a further one-off “thank you payment” in June, with the quantum decided closer to that date. This would be in addition to the usual year-end performance review and reward process.

Mr Wingrove said: “We are paying our people back before our partners, whose distributions remain at the reduced rate. If momentum continues, we expect to be able to bring partner earnings almost back to the pre-reduced rate for 2021.”

He said the firm was hiring and “actively investing again for growth” after the COVID-19 cutbacks which saw about 200 people made redundant. Late last year, the firm said it would take in its usual number of graduates – about 600 people.

Mr Wingrove warned staff at Wednesday’s town hall that the firm continued to face a “very volatile” business environment.