By Colin Kruger
Consulting giant KPMG Australia boss Andrew Yates has taken a hit to his pay packet in the past financial year, with his remuneration cut by $600,000 as a softer local economy took its toll on available consulting work.
In its annual release on Wednesday, KPMG reported that its revenue for the year rose more than 9 per cent to $2.55 billion.
KPMG Australia CEO Andrew Yates’ pay has dropped by $600,000.Credit: Alex Ellinghausen
However, average remuneration for its partners who own equity in the business - and receive most of their pay as a share of its earnings - dropped by $50,000 to $700,000 last year.
Yates’ pay dropped from $2.8 million to $2.2 million.
KPMG said the performance reflected uncertain economic conditions and a constrained consulting environment, particularly in the second half. Yates’ pay drop reflected the financial performance of the firm, it added.
“Given the challenging economic environment, I’m pleased to report a solid financial result,” Yates said. “I’m really pleased with our revenue growth of 9.1 per cent.”
He acknowledged the spotlight put on the entire profession - following the news of PwC’s use of confidential government information to market tax avoidance plans to tech giants - has become an issue for the consultancy sector.
“The message that we have put into our teams is we just need to be making sure that work that we are putting ourselves forward for is truly value-adding work for the government,” Yates said.
He added KPMG has owned up to a string of recent issues, like more than a 1,000 staff cheating on an exam and its role in the controversial NSW Government’s Transport Asset Holding Entity (TAHE), which was designed to hide the costs of the state’s railways by shifting billions of dollars of expenses off the state budget and into the new entity.
“In both instances we owned our mistakes and focused on learning from the experiences. To address the TAHE issue, we have introduced ongoing improvements to the way we manage potential conflicts,” Yates told staff in an email on Wednesday morning.
However, the firm defended its lucrative work with the Defence Department amid allegations from ABC’s Four Corners that KPMG staff charged for work that was not done.
“We strongly refute allegations that KPMG over-billed Defence. Defence has publicly confirmed that their investigations into allegations by a former Defence employee, when they were raised back in 2016, were unsubstantiated. Separately, KPMG also investigated various claims made by a former contractor in 2019. There was no evidence to support over-billing of Defence,” Yates said.
KPMG has also reiterated that it is reviewing its policy on political donations. It says no cash donations were made last year but donations totalling $160,000 were made to political parties consisting of in-kind contributions, event sponsorships and memberships of political forums.
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