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Compensation Watch ’10: Is Anyone at KPMG Getting Impatient?

Posted on by Caleb Newquist

It’s bad enough that KPMG is the last of the Big 4 to announce their compensation numbers.

But here’s the real problem Klynveldians – now that the Fighting Irish have blown two big games, two weeks in a row, to two Michigan rivals, John Veihmeyer is desperate for a Lou Holtz pep talk which means watching the old man on TV. This also means suffering through the shallow diatribes of the horrendous Mark May which we don’t wish upon anyone. But that’s a whole other matter.

What concerns us is whether J. Veih manifests his frustration by going back on his word on merit increases and bonuses from earlier in the summer. While this would be unprecedented show of loyalty to Touchdown Jesus, it probably wouldn’t do much for the morale of the firm.


Gridiron failure aside, it’s our understanding that more than a few people are getting antsy over the compensation news and now that KPMG has announced the new partners, the only thing left is to share the shockingly good or heart-wrenchingly disappointing news to all the mini-Flynns.

We invite those with first-hand knowledge, well-researched theories or wild-ass guesses to share their thoughts on KPMG’s eagerly awaited compensation news. And of course, keep us updated with any weepy communication from John. That is, if he managed to get out of bed this morning.

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(UPDATE, VIDEO) What Is the ‘Next Level’ Coming to KPMG?

From the mailbag:

Relatively ominous link on our internal homepage saying “get ready” “the next level is coming” as of 6.6.11.


We’ve confirmed this “next level” with several people and also that there is a video that Klynveldians are watching. We’d really like to see some screen shots of this, just to get some context. In the meantime, we encourage you to speculate about this “next level” and why you have to “get ready.” I’ll kick things off:

A) Tim Flynn’s retirement party is going to be epic.

B) Omaha Steaks announces a special “KPMG Package” that will drive the other, non-meaty firms crazy.

C) KPMG seeks revenge on PwC with their own competitive poaching efforts by offering the head of the mailroom at 300 Madison a 10% raise and a Phil Mickelson autographed hat.

D) Your ideas.

UPDATE:
Supposedly, this is the transcript to the video (still no screen shots, it’s called “Print Screen” people!). Our tipster wrote, “Interesting video that gives very little hint to what the ‘Next Level’ is other than lots of talk of a ‘high-performance’ culture. Maybe it has something to do with changing performance review structure a la PwC. The video definitely gives an ominous feeling as if the KPMGers in it are running out of time and people aren’t adapting to the changing market fast enough for their liking. All in all pretty strange vibes.”

Welcome to the Next Level – Video Transcript

[VARIOUS VOICES DELIVERING SHORT PHRASES]:

The market’s changed…

In order to compete in today’s world we have to keep up with change…

It’s a mindset… It’s a way of behaving…

It’s about a continuous journey…

Our ambition is greater than where we are today…

The attitude is contagious…

We’re not satisfied…

It’s really about taking it to that next level.

Keep us updated.

UPDATE 2:
Another tipster hears that it has something to do with the-next-level.com but “[I] don’t really know what they plan to do with it.” Poking around the site, it appears that it would be related to “Developing the Next Wave of Senior Leaders” but I’ve checked out for the week and don’t have the will to dig further right now.

UPDATE 3:
Well, the video finally made it’s way into my inbox and I’ve posted it on the next page for your viewing pleasure (I realize Klynveldians have seen it already).

After watching it a number of times I still can’t make heads or tails about what the “next level” will be but hopefully it’s does just to this movie trailer-esque video.

KPMG’s U.S. Chairman and CEO Upgrading to KPMG Global Chairman

Congratulations are due to John V. for reaching 97% completion on his world domination plans: […]

First Marblehead Taking a Mulligan on Financial Statements

More importantly, how are the KPMG auditors celebrating (because we want to know)?

From the 8-K, filed this morning:

On May 10, 2011, The First Marblehead Corporation (the “Corporation”) announced that its board of directors (the “Board of Directors”), in consultation with management, the audit committee of the Board of Directors (the “Audit Committee”) and KPMG LLP, the Corporation’s independent registered public accounting firm, concluded that certain unaudited financial statements previously issued by the Corporation should no longer be relied upon.

In order to correct errors in the recording of certain non-cash items, as described below, the Corporation will restate the unaudited financial statements contained in the Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010 (the “Q1 Form 10-Q”) and the Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2010 (the “Q2 Form 10-Q”). The Corporation expects to file the restated Q1 Form 10-Q and the restated Q2 Form 10-Q, as well as the Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2011 (the “Q3 Form 10-Q”), no later than May 16, 2011.

If you really want to get into the gory details, First Marblehead is bringing 14 securitization trusts onto the balance sheet that were previously accounted for off-balance sheet and its deferred tax assets in Q1 and Q2 are jumping over to the liability side (and the corresponding benefits are becoming expenses). The company says this is NBD as CFO Ken Klipper said, “These restatements … do not affect our cash position and are expected to have no impact on our ongoing business operations.” But the next six days may be a little uncomfortable for the accounting department and the KPMG audit team.