E&Y’s Dallas office sure appreciates their new associates because they’ll be the only ones getting pay raises this year. It’s either that or they want to the put them in the position for additional ridicule until the fresh batch of new associates comes on.
According to the tip we received, the announcement was made at the townhall meeting today and this is first office of any firm that we’ve heard of to make an official announcement to employees that pay was being frozen.
Those being promoted to a new level (e.g. SA to Manager) will receive bonuses but no details were given. We’ll update as we learn more.
Category: Big 4
If it happens at a Big 4 accounting firm, we’re talking about it here.
Ernst & Young Interns Receiving Offers Today?
Guest 6 @ 1:03 informs us that interns may be returning from their little rendezvous with their international counterparts to find out if they made the cut of those receiving full time offers. This is clearly a matter of “win or lose, we still booze”.
So whether you’re a proud new E&Y’er or you dreams of being a CPA-rock star have been blown to smithereens, let us know the details. If you’ve got the scoop on salaries and numbers discuss in the comments or send us tips to tips@goingconcern.com
Follow-up on PwC Layoffs
A quick follow-up on the layoffs we mentioned in last week’s firm watch that went down at the PwC Denver office. We heard over the weekend that it was approximately a dozen employees that got the boot and it occurred at all levels including at least one senior manager.
The layoffs, which occurred last month, were deemed to be “performance related” which has been P. Dubs’ consistent story regarding cuts. Similarly, everyone seems to consistently disbelieve that story. If you have more details regarding these layoffs or if there were recent layoffs at your office, let us know at tips@goingconcern.com.
KPMG Cancels Christmas Hanukkah Kwanzaa the Holidays in August
To round out the year, KPMG is kindly reminding everyone about the SPEND SMART initiatives implemented this year and with just two months to go in the fiscal year, the Radio Station has decided that some additional belt tightening is necessary.
We understand that the email we received will be sent out by each Office Managing Partner to each individual office. We have not received confirmation that employees have received the email. We are reaching out to KPMG for co rong>See the Firm’s statement below.
According to the email obtained by GC, Radio Station’s leadership has decided that all offices will suspend this year’s holiday office parties. Instead offices will host “community service events” between Thanksgiving and New Year’s. We find this commendable that the firm wants to give back in this fashion but we imagine some of you probably would probably still like to get your holiday party drink on.
Some other cost cutting measures for August and September include:
Check out the entire text of the email, after the jump
To: All Partners and Employees
From: ANY OMP
Additional SPEND SMART Initiatives
First, I want to thank everyone in the ANY office for following the many SPEND SMART initiatives that the firm has implemented this year. Your compliance with the firm’s travel and meetings policies, as well as careful management of other costs, has enabled the firm to reduce our expenses by hundreds of millions of dollars.
In spite of some indicators that the economy may have hit its lowest point, businesses everywhere are still feeling the impact of the economic crisis, and that includes our firm. And while there are indications that the economy is at the beginning of a recovery, no one can accurately predict how long that will take.
With that in mind, the Operations Committee has identified some short-term cost management initiatives for travel and meetings that–if implemented immediately–can help us begin FY 2010 in a stronger position. Those measures are outlined below and remain in effect until October 1, unless otherwise noted.
During the next two months, the firm will be reviewing all of our Time and Expense policies to align with our cost structure for FY 2010 and beyond. However, we’ve made one decision now that will impact the way we celebrate the holiday season.
Community Service Event
The end of the calendar year is traditionally the time when KPMG offices hold parties to celebrate the holiday season. A great deal of time and planning go into these events and they are a great opportunity for all of us to get together in a festive atmosphere. However, given the impact of the economy on so many people’s livelihoods, people throughout the firm–at all levels–questioned whether there would be other ways we could create this same sense of community during the holiday season while giving back to those in need. After careful thought and consideration, firm leadership has decided that all KPMG offices will suspend this year’s holiday office parties and instead host a community service event between Thanksgiving and the New Year.
You may recall that last year, in lieu of a holiday gift, the firm donated a full week of meals to families in need through an organization called Feeding America. In total, we donated 1.6 million meals in the communities where we live and work.
This is a tremendous way for all of us to come together to help make a meaningful difference for people in need during the holiday season. You’ll be hearing more about this effort and how you can get involved later this fall.
In the meantime, please do all you can to follow the SPEND SMART guidelines we announced in October and the additional initiatives I’ve outlined below.
Meetings and Travel
· Additional Travel Restrictions – Airfare is one of our largest travel expenses. Currently, our policy provides partners and employees with a choice of airlines when traveling. Until October 1, the travel team will book the lowest cost flight for your destination and travel times, regardless of the airline. We also ask that you continue to limit non-client travel as much as possible, and verify the criticality of all international travel.
· Car Service – Until October 1, car service may only be used when a taxi or one’s own car is not available. We also ask that you use taxis for transportation to and from airports, rather than a car service. If taxi service is not available in your city or area, or the cost of using a taxi exceeds that of using a car service, a car may be used. We will continue to honor our car service policy for employees required to work past 8:00 p.m. during winter and 9:00 p.m. in the summer; however, we expect that during August and September the need for this service will be rare. Click here for information about our transportation policy.
· Meal Reimbursements – During August and September, we are putting the following policies in place regarding meal reimbursements:
Lunch – Lunch for partners and employees while traveling will not be reimbursed since this is a meal that one would buy during the workday regardless of location. We will continue to reimburse lunch meetings with clients.
Non-client Meals – During these two months, the firm will not reimburse non-client meals held outside our offices. Meal expenses for those traveling for internal training or meetings are subject to the expense limits allowed by our meal policy. As always, team leaders should use their judgment when ordering meals for groups working overtime.
Cell Phones, PDAs, and Other
· One Mobile Device per Person – Effective August 1, we will no longer reimburse individuals for both a cell phone and a TreoTM or Blackberry®. People who have both devices have the option of adding phone service to their PDA. If you wish to keep both devices, you will be charged the full price of service for one. In addition, per our existing policy, we will deduct $20 a month from everyone using firm-supplied cell phones or PDAs. We also encourage you to review your current plan to determine whether you need all the features to which you’ve subscribed. To learn more about the various mobile plans available to you, please click here.
· Inter-office Mail: Use Scanning and e-Fax – Going forward, we will be looking at ways we can reduce the cost of handling interoffice mail, including the frequency of delivery. In the meantime, we encourage you to make use of all the technology available within the firm to send documents between offices, including scanning documents that can then be e-mailed to colleagues or clients. When scanners are not available, make use of our e-Fax capabilities. Check with your local OneStopOps group to learn more about these services.
In closing, both the ALL partners and I want to thank all of you for your ongoing support of our SPEND SMART initiatives. Your efforts have made a difference and we continue to welcome suggestions to help our office and the firm run more efficiently.
Even more important, we want to thank you for your high-quality service to our clients. We all know that these are difficult times, but that is why our clients are depending on us to deliver our highest standards of service and professionalism.
Thank you for your continued support.
UPDATE, 5:51 pm EST: We reached out to KPMG regarding the Grinchiness and we were provided with this statement:
“Like businesses everywhere, we’re identifying cost-saving opportunities that will provide the most benefit while still allowing us to provide high quality service to our clients.”
Rumor of the Day: Comp and Bonus Pools at Big 4 Seriously Depleted
We’re not trying to ruin your Friday but at the very least, this might encourage some of you to get your drink on a little earlier than planned.
Rumor received late last night that a Big 4 CEO was asked about compensation and bonuses at some grin n’ grip and he responded that the compensation adjustment and bonus pools for all the Big 4 firms was going to be down 90%.
This fits together nicely with the rumors of freezing and/or cutting pay that have been going around. Okay, now try to get some work done or figure out where you’ll be having that three martini lunch.
Lock up the Booze, E&Y Interns in Orlando
We just picked up one of the few Tweets that has made it through today:
This type of event will likely lead to many things including international hookups, late night skinny dipping (and probably urinating) in the pool, and widespread drunkenness of epic proportions.
If you’re down in Orlando this weekend for this three day extravaganza, send us your stories of debauchery to tips@goingconcern.com. According to the website, the festivities are at Disney World, so don’t embarass your firm yourself and try to keep the nudity out of the view of children.
International Intern Leadership Conference [EY.com]
Firm Watch: Deloitte
The last of the Big 4 Horsemen of the Bean Counter Apocalypse is Big D-period. Catch up on the rest of the usual suspects: Radio Station, P. Dubya, and E&Y to get the gist of this little exercise.
Deloitte’s got a pretty similar list as the rest of the firms but with a couple twists so let’s get down to brass tacks:
Get the details, after the jump
• Losing Clients – We’ve heard that firms are low-balling their RFP’s so it’s no surprise that some clients are switching but Deloitte seems to have had worse luck than others. UAL, Heelys (for the kids), Bear Stearns, Merrill Lynch, and Washington Mutual have all disappeared from D-period.
• Lawsuits – Believe it or not, the Parmalat debacle is not a done deal, as some lawsuits against the US and Internationalfirms are still out there as a judge ruled in January that the agent/agency issue was worth a closer look.
• Madoff Exposure – All week we’ve been referring you to the list of Feeder Fund Lawsuits over at D&O Diary. In a small water into wine moment, Deloitte does not appear on the list once. Nice bullet dodge Big D.
• Overtime Lawsuits in California – Deloitte is listed as the defendant in three of the cases.
• Layoffs, performance reviews, etc. – So, as we saw yesterday, this is where Deloitte’s sitch gets, pret-tay, pret-tay, pret-tay ugly. Layoffs were reported in both December and March nationwide. The performance stealth cuts are common here too and more may occur. All this is going on while an out-going CEO is talking to the press about how bad things have been in the last five years and the UK CEO is having Scrooge McDuck pool parties.
• Miscellaneous – The worst drug dealers in the world used to work for Big D.
So that does it for Deloitte, God bless ’em. And that does it for the Final Big 4. We’ll throw in GT and BDO in for good measure but if you want to throw some more jabs at the big boys, email us at tips@goingconcern.com. You’ve got until around high noon tomorrow before we’ll start coming up with our completely unfair and unscientific ranking.
Firm Watch: KPMG
So after dissecting opining on sliming P. Dubs and E&Y, we’re moving on to KPMG in round three. We’ll dispense with the pleasantries and get right to the list:
• New Century Lawsuit – This is the ball buster for KPMG. A $1 billion lawsuit filed back in April that alleges “grossly negligent audits”. This tale also includes a smoking gun quote from an email sent from New Century engagement partner to a specialist, “As far as I am concerned, we are done. The client thinks we are done. All we are going to do is piss everybody off.” We’re not sure if it’s possible to take that out of context.
Check out the rest of the Radio Station’s list, after the jump
• Madoff Exposure – Per D&O Diary, the Radio Station is named as a defendant in at least ten lawsuits as a result of auditing the Madoff feeder funds.
• Overtime Lawsuits – Listed as a defendant in five lawuits.
• Layoffs, Pay Freezes, etc. – Allegedly, the word that pay was being frozen was slowly leaked from the top on down. Layoffs have been pretty steady for the last twelve months including rounds in November and March in the audit and advisory practices. In addition, the ubiquitous trend of performance rating cuts is in full effect, and we just learned that by the this time last year, audit interns had heard yay or nay on receiving a full time offer. That probably makes for some nervous intoxicated co-eds.
• Miscellaneous – Phil Mickelson, the Radio Station’s walking billboard, was a bridesmaid at the U.S. Open for a third fourth fifth time.
Done-zo. Anything else you want to see tacked on? Drop us the dirt at tips@goingconcern.com and we’ll get it in for the final tab.
Preliminary Analytics | 08.05.09
• Donald Trump Faces Bondholder Battle in Bid to Reclaim Casinos – Our advice: Don’t mess with this hair ego man. [Bloomberg]
• ADP Says U.S. Companies Decreased Payrolls by 371,000 – The trend of lesser bad news continues. [Bloomberg]
• Banks Get Picky In Doling Out Credit Cards – Postal workers rejoice. [WSJ]
• Chinese survey finds prostitutes more trusted than officials – More bang for your buck. [The Raw Story via Naked Capitalism]
Deloitte UK CEO Does All Right For Himself
Apparently Deloitte was feeling a little left out of the populist outrage because after the news that Big D UK reported shrinking revenues yesterday, today we learn out that John Connolly, Big D CEO across the pond, earned £5.22 million this past year.
Not too shabby even though that’s a little less than his earnings last year of £5.69 million, according to the London Evening Standard.
Big John should probably send some biscuits over to the Royal Bank of Scotland for the payday as RBS paid Deloitte nearly £59 million this past year, up from the £31 million in the year prior. RBS has received billions of bailout funds from the UK government, so some crazy taxpayer wrath headed in the direction of Big D would not be outside the realm of possibility.
Deloitte boss rakes in £5.2m after the bailout of RBS [London Evening Standard]
Firm Watch: Ernst & Young
Round two of our Firm Watch this week covers everybody’s favorite resident of Times Square, Ernst & Young. We’ll get started on E&Y’s trubs with the Schein lawsuit where the firm was recently found to be marginally negligent and were ordered to pay a smidge over $10 mil as a result. NBD really, as E&Y probably spends that much money screwing up the spelling of their name on cheesy coffee cups.
The more serious stuff on E&Y, after the jump
Here’s some major stuff that probably keeps some E&Y partners awake at night:
• Lehman Brothers – E&Y’s role in the collapse of Lehman Brothers has got little attention in the press, however, suits have already been filed by San Mateo County in California, the City of Long Beach, California and the Southern District of Texas. It wouldn’t be unreasonable to speculate that more suits are likely to be filed.
• Madoff Exposure – E&Y also has significant Madoff exposure, as the auditor of several feeder funds. D&O Diary has them listed as defendants in at least ten different lawsuits.
• Layoffs – There have lots of reports of layoffs at E&Y in the last month or so, many of which occurred in the tax practices in the Northeast, and many of those getting the axe were supposedly on visas. Real classy. This was a follow-up to layoffs that also went down in February. As if that’s not enough, there were also rumors of layoffs occurring monthly since September ’08 in the Detroit office. Plus, with lots comments about stealth layoffs at all levels, it sounds like it has been a bloodbath at E&Y.
So that seems to be the major stuff, from our view, for E&Y. Again, we want to know what we’re missing. We’re looking for tips and dirt on any of the things we discussed above and everything we didn’t mention. Email us at tips@goingconcern.com and we’ll get all your additional gripes on here.
Deloitte UK Reports Shrinking Revenues
Big D’s UK revenue was down 2% to £1.93 bil for the latest fiscal year, marking the first time a Big 4 firm has reported declining revenues in six years.
Partners are still doing okay though, as they will receive £601 million. That’s an average of £883,000 per partner. Not too shabby, even though that’s down over 7%.
Leaders within the firm are expecting another rough year ahead for the economy but are still planning for “growth not contraction”. We’re not sure how that fuzzy math will work but whatevs.
Oh, and little D’s, don’t worry, you got a shout-out from John Connolly the UK CEO: “our success will continue to be the product of our exceptionally talented people being relentlessly committed to our clients, to market leading, innovative service and to an obsession with quality”.
Relentlessly committed. Obsession with quality. Sounds like they must have re-instituted the tradition of shipping the criminals lesser performers down under.
Deloitte revenue drops in `extremely tough’ market [Accountancy Age]
Deloitte’s UK revenues shrink 2% [FT.com]