RegulationCorporate GovernanceKPMG’s trainees learn a harsh business lesson

KPMG's trainees learn a harsh business lesson

KPMG's audit trainees now understand that bonuses aren't set in stone

SAD NEWS for KPMG’s second-year audit trainees – no £1,000 bonus for those passing their exams, as had been the convention.

It could well be argued that missing out on the bonus due to the tough audit market conditions is as good a lesson as they could hope to have beyond sitting their exam papers. Your individual performance might have been good, but when you’re part of a bigger group of staff then you just have to bite the bullet sometimes. Harsh, but that’s working life.

As an aside, where do you draw the line on bonuses? RBS posted a loss, but its investment bankers hit enough targets to warrant a bonus. Fair to other RBS staff? The taxpayer? The investment bankers could well argue that as an entity it ‘did the business’ past-performance aside.

But back to KPMG. Other interesting things came out of City AM’s ‘no-bonus’ story.
The trainees were told by email from audit COO Adrian Stone. An email with ‘First Time Pass Bonus’ in the subject line. Maybe face to face would have been a more appropriate way to deal with it…although the threat of physical and verbal violence probably deemed it not the best option. It’s also an improvement on text messaging bad news, which some large professional services firms have partaken in, in the past.

Am I also being mischievous in wondering why the audit COO emailed the bad news, instead of KPMG’s UK head of audit Oliver Tant? With Tant in the running for the leadership role at the firm, I expected his name on the bottom of the email. In terms of balance, KPMG explains that as COO, Stone is there to run the business on a day-to-day basis, which involved monitoring its performance. As such, he was appropriate.

Last point, and just for good measure, the email points to tough times in the division. The question among Big Four accountants may well be ‘will I get a bonus?’ rather than ‘how much will my bonus be?’ in 2012.

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