Remuneration report

KPMG N.V. has a clear, consistent approach to remuneration. The firm’s people are entitled to both a fixed salary and performance-related variable pay. In determining variable pay, several criteria are considered, the most important of which is quality. As a matter of policy, professionals who underperform on quality are not eligible for variable pay. However, KPMG N.V. does reward those who go beyond the original scope of their roles and/or have a positive impact on their team and the company as a whole.

For all colleagues, performance is assessed against pre-agreed annual goals, which are linked to KPMG N.V.’s business plan, culture, values, and behaviors. Performance is graded, with these grades – together with an individual’s potential career path – used to determine remuneration. KPMG N.V. regularly benchmarks its remuneration against selected markets to ensure the firm remains competitive.

For engagement leaders – that is, those leading audits or advisory projects with clients – performance scores are determined using standardized quality and risk metrics (including the results of external reviews and internal monitoring programs, “leading by example,” and timely completion of training).

Partners

There is a different remuneration structure for equity partners. They do not receive a salary; instead, each year, they receive a share of the profits, which is also adjusted for performance (starting with quality). In 2023/2024, partners received an average profit share of EUR 701,000, an increase of 53% compared to the previous year (EUR 457,000) as the average profit share in 2022/2023 was impacted by the PCAOB penalty and the costs of the investigation into answer sharing. Pay for partners is determined by three factors: the number of partners, the company’s profit for the year, and personal performance. Management closely monitors any partners scoring four or five (the two lowest grades), for whom individual improvement plans are put in place. This process is overseen by the Supervisory Board. Equity partners 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 equity partners (in line with measure 3.5, published by the NBA).

Board of Management

Members of the Board of Management receive a fixed compensation. They are not eligible for variable pay. Equity partners serving as members of the Board of Management are also excluded from profit sharing. The remuneration for Board of Management members is determined at the beginning of each year by the Supervisory Board, based on levels of partner pay over the past three years (a so-called rolling mechanism), long-term performance of the firm, market trends, and professional responsibility. This is done in order to focus remuneration on the longer-term performance of the firm. The CEO, as non-partner, is entitled to a severance payment in certain circumstances and receives retirement benefits as a participant in the pension scheme. When evaluating the performance of members of the Board of Management, the Supervisory Board takes into account personal performance, as well as members’ approach to long-term KPIs in areas such as quality, public trust, client satisfaction, people management, and sustainable business growth.

As a result of the rolling mechanism described above, the remuneration of the Board of Management in 2023/2024 was adjusted by the PCAOB penalty and the costs of the investigation into answer sharing during 2022/2023. These costs will also be reflected in the Board of Management’s remuneration in the coming two fiscal years. Please refer to the financial statements (new window) for details of the Board of Management’s annual remuneration.

Supervisory Board

Members of the Supervisory Board receive fixed annual fees. In 2023/2024, they received total remuneration of EUR 472,000 (2022/2023: EUR 461,000). Remuneration (in EUR) for 2023/2024 can be specified as follows: