Maintaining quality standards
Positive impact on the firm’s five strategic focus areas (public trust, clients, people, digital & innovation and financial strength).
Of these, the most important is quality – as a matter of policy, we won’t reward employees who underperform in this area.
For all our professionals, performance is assessed against pre-agreed annual goals – these goals are linked to KPMG’s culture, values and global behaviours. Performance is graded; these grades then determine both the ‘growth path’ for individuals, and their subsequently their remuneration. As a company, we regularly benchmark our remuneration to ensure we remain competitive.
For engagement leaders – i.e., those leading audits or advisory projects with clients – the performance review process is based in part on standardised quality and risk metrics (including the results of external reviews and internal monitoring programmes, ‘leading by example’ and timely completion of training).
Our equity partners have a different remuneration structure – each year, they receive a share of profits, also adjusted for performance (starting with quality). Our Board of Management and Supervisory Board members receive fixed amounts – they are not eligible for variable pay.
Our equity partners receive profit share through KPMG Coöperatie UA. In 2020/2021, partners received on average EUR 735,000, compared with EUR 410,000 the previous year – a reflection of higher company profits. Pay for partners is determined by two factors: the company’s profit for the year and personal performance.
Management monitors closely any partners scoring 4 or 5 (the two lowest grades). Where necessary, individual improvement plans are put in place. This process is overseen by the Supervisory Board.
Certain partners – in both Assurance and Advisory – are subject to ‘clawbacks’; this allows the firm to recover part of their annual management fees in the case of ‘demonstrably culpable conduct’. A deferred profit-sharing scheme is also in place for assurance partners (in line with measure 3.5, published by the Royal Netherlands Institute for Chartered Accountants).
Over the past year, the clawback policy was not applied.
Success-sharing benefit (issued in March 2021)
Success-sharing benefit4all (issued in September 2021)
Bond scheme (for those applying)
Enhanced variable pay
These payments were intended to reward employees following the recent pandemic and to enable them to share in the firm’s increased profits for the year.
Members of the Board of Management receive fixed compensation; they are not eligible for variable pay. Instead, remuneration is based on past levels of partner pay, market trends and professional responsibility. Equity partners serving as members of the Board of Management are excluded from profit sharing.
Performance is assessed using financial and non-financial indicators – the latter including public trust, client satisfaction, corporate responsibility and other social criteria.
The Supervisory Board designs the remuneration policy for the Board of Management which is subsequently approved by the General Meeting of KPMG N.V. (in the form of the board of Coöperatie KPMG U.A.). Remuneration levels for individual Board members is made in accordance with this policy. The Supervisory Board is responsible for this. When determining performance evaluation, the Supervisory Board considers quality, public interest, long-term value creation, people management and the prospects for sustainable business growth (based on advice from the Board’s Remuneration & Appointment Committee).
For details of the Board’s annual remuneration, please refer to our Financial Statements.
Members of the Supervisory Board receive annual fees. In 2020/2021, the Chair received EUR 72,000; all other members EUR 55,000-57,500. For the last six months of the previous year, Board members had accepted a 15% reduction in fees – in line with a similar pay cut for members of the Board of Management.