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KPMG partners count their good fortune on pay

By This Is Money
Updated: 03:07 EDT, 17 December 2010

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UK partners at top accountancy firm KPMG will receive average pay of £763,000 for 2010, a 10% increase on last year.

BAE probe: KPMG is under investigation by accountancy watchdogs over its auditing of BAE Systems

The lavish sums paid to the bean-counters come at a time when unemployment is rising and audit firms are under fire for failing to spot problems in their clients' accounts.

KPMG is under investigation by the Accountancy and Actuarial Disciplinary Board for its auditing of BAE Systems between 1997 and 2007, following long-running bribery and fraud probes by the Serious Fraud Office and the US Department of Justice into a web of commission payments by the defence giant around the world. The company denies misconduct.

The amounts paid to KPMG partners are more than double the average £308,000 paid to Goldman Sachs' London employees for 2009.

Senior partners at KPMG, including John Griffith-Jones, the UK chairman who received £2.3m for 2009, will be paid much more than the average. Junior partners will get less.

Griffith-Jones' latest pay packet will not be disclosed until March but since KPMG's profits in the UK rose 10% to £428m, it is likely to be higher than last time.

KPMG's revenues for Europe as a whole declined by 3% to £3.6bn after stripping out acquisitions and exchange rate movements. Worldwide, revenues were steady at £12.9bn.

Separately, insolvency specialist Begbies Traynor suffered a £1m fall in profits to £2.6m as fewer businesses than expected have gone under in the economic slump. The shares fell 1.75p to 61.75p and the interim dividend was steady at 1.2p a share.

The latest official figures showed a 17% drop in the number of firms falling into insolvency in the first half of this year, to 10,520. Ric Traynor, executive chairman, said: 'It is good news for the rest of the world but not for us.'

Begbies' revenues from insolvency work, including video games company Realtime Worlds and budget holiday operator Goldtrail, decreased by £2.8m to £27m.

Traynor predicted the number of companies going bust will rise to 23,000 from around 22,000 for the whole of 2010, but that they will remain well below their peak of around 30,000 in the 1990s.

'We have had to practice what we preach and restructure ourselves,' he said.

'We have looked at savings on our payroll, property, marketing and entertaining. It will be modest Christmas parties this year.'

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