PracticeAccounting FirmsKPMG chairman feels the pinch

KPMG chairman feels the pinch

Mike Rake, chairman of KPMG International and the firm's UK senior partner, has felt the economic downturn bite after seeing his basic pay drop by £250,000 in 2002.

Link: KPMG UK results disappoint

In 2002, Rake’s income dropped from £1.7m to £1.45m. His share from the sale of KPMG’s consulting arm – £153,000 – boosted his total income to £1.6m.

The year was also rough for the firm’s other partners, with operating profits per partner falling to £352,500 compared to £441,600 in 2001.

Altogether, the partners earned an average of £590,400, if the windfall from the sale of the consulting arm has been taken into account.

The economic downturn hit KPMG hard, with operating profits dropping 21% to £212m, although its revenues held steady at £1.2bn. The drop led to a restructuring programme which saw more than 1,000 redundancies.

KPMG was also faced with embarrassment as it saw its planned merger with Andersen collapse after a highly publicised announcement. Other highlights in 2002 included the change of its legal status to a limited liability partnership, and the sale of its UK consulting activities.

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