Aussie CEO cops $600k pay cut as economic downturn hits scandal-plagued industry

The fat cat CEO may have taken a pay cut but his firm still raked in billions as big corporates continue to profit while everyday Aussies suffer.

The boss of KPMG, one of Australia’s big consulting firms, copped a $600,000 pay cut last financial year, thanks to a softer economic environment.

In its financial results for the year to June 30, announced on Wednesday, KPMG revealed its CEO Andrew Yates saw his annual salary fall from $2.8 million to $2.2 million.

This was despite the consulting giant booking a 9 per cent rise in revenues for the year to $2.55 billion.

The firm described the consulting environment as “constrained” in a concerning sign for what is a scandal-hit sector.

Earlier this year, fellow consulting giant PwC was rocked by allegations a consultant had shared confidential information learned while working on a government contract with colleagues, who used it to help tech giants avoid tax.

KPMG has not been immune from controversy, with ABC’s Four Corners alleging its staff charged clients for work that was not done while undertaking a contract for the Department of Defense.

KPMG Australian CEO Andrew Yates has copped a $600,000 pay cut. Picture: NewsWire/Monique Harmer

KPMG released its annual results on Wednesday. Picture: Sean Gallup/Getty Images

While KPMG denies these allegations, Mr Yates acknowledged the sector’s reputation has taken a hit.

“The spotlight on our profession during the year has heightened community awareness and raised expectations on integrity, confidentiality and trust. It is crucial that we regularly review our operations to ensure they are aligned with the standards expected by the Australian community,” Mr Yates said.

But despite the softer economy, Australia’s corporate giants continue to rake in eye-watering profits thanks to price rises that are adding to inflation, while everyday Aussies suffer in a phenomenon known as greedflation.

Telstra has recorded surging profits for the 2022-23 financial year, up 13 per cent to $2 billion off the back of price rises foisted on its customers.

Personal finance expert and author of Kill Bills, Joel Gibson, told news.com.au: “Telstra is putting up the prices of all plans in line with inflation, which it now does every year regardless of whether its costs are going up. Just because inflation rose 7 per cent doesn’t mean costs have gone up across the board for all businesses by seven per cent.”

Telstra’s profit topped $2 billion. Picture: NCA NewsWire/Andrew Henshaw

CBA’s profit topped $10 billion. Picture: NCA NewsWire/James Gourley

Another example is the record $10.2 billion profit posted by the Commonwealth Bank recently, which was in part driven by an increase in its net interest margin, which is the difference between the interest rates banks charge borrowers and those they pay to savers.

“It’s very hard for people to stomach reports about some of the biggest businesses in Australia making record profits at a time when we’re hurting. It’s not entirely down to price gouging but I definitely think there’s an element of that, businesses are maintaining their profits and at the same time expecting households to take the pain,” Mr Gibson said.

Greedflation is set to attract closer scrutiny with the Australian Council of Trade Unions’ recently announcing an inquiry into corporate price-gouging.

The inquiry, to be chaired by former ACCC chair Dr Allan Fels, will “analyse the connection between living standards and surging corporate profits”, the union said.

Originally published as Aussie CEO cops $600k pay cut as economic downturn hits scandal-plagued industry