PracticeConsultingKPMG profit shake-up

KPMG profit shake-up

As KPMG prepared to announce its annual results for the UK, insiders suggested next year’s profits could be shared on a global rather than national basis – one of a rash of changes designed to eliminate divisions within the firm.

Global chairman Colin Sharman is under pressure to act quickly, following this week’s announcement that the merger between Coopers & Lybrand and Price Waterhouse had been cleared by competition authorities in South Africa, Poland and New Zealand.

In the past, KPMG has shared profits on a national basis, but insiders suggested that ‘may have to change’. Alan Reid, head of KPMG consulting, said new arrangements could be put in place ‘to motivate national partners to manage clients to work globally.’

Although an unrestricted international profit share is unlikely, KPMG could use the E&Y model of cost-sharing with cross-border profit sharing where possible.

If any profit sharing is to win approval by the global board in May, profits would have to be comparable in Europe and the US. A spokesman for KPMG US, which announces its results before the UK firm, said fee income rose by 30% over the last seven months, with high profit levels.

In 1996, UK growth was just 6%, with Consulting taking the rap as its revenue declined. Better results are expected to be announced today, with Reid claiming Consulting grew more than 30% in the past year.

Sharman has already announced a raft of changes to shift power from individual practices to a global centre. He would like to have a powerful international chief executive officer, and a ‘vice-president’ whose role would be to promote global account management.

Merger aftermath, pages 10 and 13.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer