Sky News has obtained part of an internal memo KPMG Global Chairman and CEO Bill Thomas sent to firm partners earlier this month in which Mr. Thomas turns his nose up at EY’s plan to split consulting and audit practices. Some choice quotes from the memo:
We are a partnership that has been strong and growing in some countries for over 150 years.
Our culture fuels this growth and stability.
Our responsibility is to leave the firm better than we found it for those who come after us – we are stewards of the business for our mentees and the next generation.
This is the very fabric of who we are.
To monetize the goodwill of our firm that has been created for over a hundred years, at the expense of the next generation, would be entirely contrary to our culture.
Sky News interprets this memo as implying “such a radical restructuring would be akin to an act of corporate vandalism.” So basically EY partners are a bunch of greedy jerks who have no problem extracting large sums of money from the many years of exceptional client service they have provided and the reputation that comes along with it. Suck it, EY. Suck it and then go cry about it into the bags of money you will get from the split when the deal goes through.
Sources told Sky News KPMG did discuss following EY’s lead when the news of the split broke — rumor is Deloitte is already considering it, though Deloitte denies this — but ultimately decided to retain its current structure even if other Big 4 firms jump on the break-up bandwagon. PwC too has said it has no plans to change its multidisciplinary model.
KPMG chief takes swipe at rival EY’s $80bn break-up plan [Sky News]
CEO Bill Thomas is spot on – the EY senior partners are monitizing years and years of the partnership goodwill for those chosen partners who happen to be partners now. So those that retired a year ago or 10 years ago, who built up the EY brand/value and “invested” their capital in the consulting/advisory practice get nothing. Shame on EY from stealing from past generations and future generations of partners.
Old enough to remember a company called bearing point was a kpmg spin off.
Hey Kevin Brown,
Old enough to remember Anderson Consulting becoming Accenture. EY selling it’s consulting business to CapGemini, and PWC selling it’s consulting business to IBM.
In other words, all of the firms did this in the early 2000s.
Deloitte retained their consulting practice while the other firms were divesting.
Deloitte was going to IPO its consulting practice, but it was cancelled due to market conditions (2002). They were late to the party. It wasn’t that this Firm didn’t try to divest Deloitte Consulting.
Hey KPMG, why don’t you tell us instead how much money you made from advising some of your clients to invest their money offshore to avoid paying Canadian taxes? Now that would be worthy news…
KPMG is a terrible company. My husband use to work in the Hartford office, and the workload was so bad he would be at work until 3AM. Slave drivers. Also need I mention 2008 recession- talk to Iceland, KPMG is toxic, terrible culture and treats their employees like dirt.
I seem to recall, as a KPMG Consulting employee, being spun off 20 years ago. And at the time Alan Buckle, the UK head of KPMGC, scurried back to remain part of KPMG while telling us all that KPMGC (becoming AtosKPMGConsulting, not BearingPoint, in UK) was the place to be. I wonder what’s changed to make that spin off the right stewardship choice then but the wrong stewardship choice now? Seems that hypocrisEY has a new employer.
Kpmg is the smallest of the 4 by miles beset with conduct, culture and leadership issues. Thomas has a big mouth for the smallest slowest growing firm. With the number of scandals his firm is involved in an IPO would simply not have any demand. He knows that and so invents some dumb virtue signalling narrative . If we talk about value and generations, how much value in the KPMG brand has he destroyed in 6 years as Global Chairman ?