BIG Four accountancy giant KPMG has axed the £1,000 bonus it usually pays the majority of its second-year audit trainees, City A.M. has learned, in a move that will save the firm around £400,000.
In a sign of significant challenges at the firm’s all-important audit division, KPMG emailed the trainees earlier this week to inform them they would not receive the cash bonus.
There are around 500 second-year trainees in the KPMG audit department and those who pass key exams first time – normally around 80 per cent – usually receive the £1,000 payment.
In an email seen by City A.M., the accountancy group said it had taken the “difficult decision” because the “audit function has come under significant pressure from the challenging economic environment in the UK”.
One trainee told City A.M. the move had been greeted with surprise and anger, after management sent an email just last month congratulating the trainees who passed first time on their achievements.
A KPMG spokesman said: “This change brings us into line with the majority of our competitors. Most of our competitors don’t pay their trainees a bonus for exam performance.”
But the trainees were “furious” when they learned the Big Four accountancy giant would not be paying them the £1,000 bonus it usually gives to its highest performers.
Adrian Stone, chief operating officer of the audit practice, broke the bad news to trainees via email at 4.15pm on Wednesday afternoon. The subject header read “First Time Pass Bonus”. The message was marked “confidential”.
“As you may be aware, our trading performance in the audit function has come under significant pressure from the challenging economic situation we are experiencing in the UK,” Stone wrote.
“As a result of this KPMG will be exercising its discretion under the training agreement and with immediate effect a discretionary bonus will not be paid this year to acknowledge achievement of first time passes in professional exams.”
In a sign of tough times at the audit division, Stone said he would only consider reinstating the bonus if the group managed to “hit its budget contribution for the full year”.
Stone continued: “I know you will be disappointed that the firm is not exercising its discretion to pay a first time pass bonus.
“However, I do hope that you will understand the balance which we are attempting to achieve between the interests of specific groups of team members and our overall team.”
One trainee told City A.M.: “Staff in the UK are furious, with emails flying across the UK offices. The feeling amongst staff is that the senior leadership appear increasingly out of touch from those in the lower grades.”