Following the news that the IT Advisory group could possibly force some professionals into the underperforming category, I had the following text message exchange yesterday with a source at KPMG that I'll refer to here as Rudy.
Rudy: Did you hear about the layoffs?
Me: Nooooo. I just posted about the possible layoffs in ITA but did something else happen?
Rudy: Performance based across the U.S. across multiple levels.
Me: Ahhhh, forced ranking, eh?
Rudy: Seems like it. Trimming the fat.
Me: Right. Know anyone that got cut?
Rudy: Yup. From Los Angeles. And I heard about a few senior managers in financial services [in New York]
Me: All audit?
Rudy: As far as I know.
Yes, that Rudy. But never mind that. By all indications, not enough people are voluntarily saying goodbye to the House of Klynveld, so the firm has no choice but to find a few expendables. If you've recently been told your capital market services are no longer needed, email us.
This morning we learned from a couple of sources that the big guy will be calling it a career officially on June 30, 2013 and the firm will announce a new CEO-elect at some point in early 2012.
Here’s JT’s message to the troops:
I have written to all our partners to let them know about my plans to retire from Ernst & Young on 30 June 2013.
Every year, our Global Executive (GE) considers the priorities and initiatives we feel Ernst & Young should focus on in the upcoming year, and these priorities are then approved by our Global Advisory Council (GAC), the top governance body of Ernst & Young.
Periodically, we also take a longer look at our strategy and vision, and involve the GAC in this as well. In July, we informed our partners that we were beginning such a long-term strategic review. The GE and I believe that our new strategy and leadership-succession plans are inextricably linked, and we agreed that June 2013 would be the right time for me to retire.
This is a normal process and the timing has worked out perfectly. I will be 58 years old, which is the normal early retirement age for many of our partners. By then, we will be implementing our new strategy and it’s right that a new leader should steer this implementation.
We are starting a robust process to identify the man or woman who will succeed me, in accordance with our regulations. We intend to identify a new Chairman and CEO elect during the first part of 2012. What I feel very good about is that we’re the type of organization that continually develops large numbers of great leaders, so I see many men and women who could lead Ernst & Young successfully into the future.
This is not a retirement letter or speech to you all, as there is much to do before June 2013. However, I wanted to be very open with you about our plans. Thank you for your continued support as we continue both our strategy and succession-planning process.
James S. Turley
Chairman and CEO
UPDATE: Ernst & Young provided us with the following statement:
In a communication to all Ernst & Young partners worldwide on 10 November 2011, James S. Turley, Chairman and Chief Executive Officer of Ernst & Young confirmed that he will retire as planned, aged 58, on 30 June 2013. The succession process to decide a new Chairman and CEO-elect is now underway and will conclude in early 2012, no later than April.
So after riding out Lehman, handing out a lot of trophies, and inspiring the greatest lyric in the history of Big 4 employee produced videos, (I’m sure there are other accomplishments too) Jimbo will ride off into the Black and Yellow sunset. This seems like an appropriate tribute:
I’m surprised no PwC’er has posted this yet. Earlier this week, Bob Mortiz hinted into “exciting changes” as to compensation structure and transparency, with details to be provided this upcoming Monday on a webcast. It might be worth posting this on your website to get some reactions from fellow PwC’ers about what this means, or to facilitate blind speculation, which is always fun.
A. Option to receive entire compensation package (including health benefits) in Omaha Steaks.
B. Spot bonuses given to employees with abnormally high utilization who manage to not die.
C. Elevator speeches will have bearing on employees’ merit increases.
D. Outstanding individual efforts will be rewarded with the choice between a serenade from Steve Beguhn or a special appearance by the DC-area piano player for your next fiesta.
E. Various competitive poaching payouts: KPMG Partner: $10,000; All other KPMG employees: $5; Ernst & Young Banking Partners: A punch in the face; Deloitte partner: $20,000; Deloitte partner with a full head of hair: $100,000 (hey, they’re hard to come by).
F. Your ideas.
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