As a Big 4 alumna, when I saw the KPMG master’s degree program, I immediately thought, “What’s the catch?”

But before we get to the catch, let’s look at the program itself a little more.

The KPMG Master’s Degree Program

Per Accounting Today, the cohort of 135 program participants for the 2018-2019 start class will get their tuition fully paid, a guaranteed internship at KPMG while earning their degree, and a full-time position when they graduate the program.

Oh, and to sweeten the deal, KPMG also offers some extra cash to cover your tax liabilities. Per the FAQs:

KPMG’s funding of tuition, and reasonable costs for room and board, books, and fees is taxable to the student. However, to further demonstrate KPMG’s commitment to the student’s success and value we place on the student’s future with KPMG, the firm will fund each student in an amount intended to approximate the additional tax liability incurred by a typical student as a result of this KPMG funding.

The sticker price of a free ride

KPMG spares no expense on this program. For example, the tuition for the one-year, 30 credit hour Master of Accounting with Data Analytics program at Villanova is $42,000. Another participating school, The Ohio State University, has one-year tuition costs of $54,315. That doesn’t even factor in room and board, or any of the other expenses paid by KPMG. All said and done, I estimate it’s about $75,000 – $100,000 per program participant.

Nine universities are participating, so the costs vary by program. In fact, while all of the programs emphasize Data Analytics, the programs themselves vary quite a bit. In some cases, like the program at Ohio State, you join the rest of the Master of Accounting students. Other schools have two different MAcc programs: their normal one and the one they made special for KPMG. If you opt for one of the latter, you’ll study only with other KPMG’ers and build a smaller network. While KPMG is relying on their prestigious name to get you to sign up for the exclusive program, it’s possible that the super specialized degree might not be as versatile on the outside. It’s worth it to look at all the options. One of the schools even has a tax emphasis, in case you’re not willing to let your love for the IRC go without a fight.

The catch

It’s suspiciously generous until you read this:

Upon acceptance to the Program, Program participants are contractually committed to remain in good academic standing and to professional employment with KPMG for three years after graduation with their Master Degree associated with the program (to begin from the date of full-time hire). Otherwise, 100 percent of the tuition, room and board, books, fees, and other amounts, including taxes, paid by KPMG on behalf of the Program participants are to be paid back to KPMG. Employees otherwise remain employees at will during (and after) the three-year period.

Hmm… you may recall my experience with the bonus clawback. This looks very similar if you ask me, but the numbers would be much, much bigger. And, you’d be much less likely to bow out early.

Smart move, KPMG

Nothing says “I’ll stay three years, even if it kills me…” like having to pay back something in the neighborhood of $100,000. It goes back to the philosophy that a great way to retain people is by holding them hostage. It reminds me of the military service academy model. For example, the Air Force Academy graduates owe five years of service for their education worth approximately $416,000. Military pilot training ranges from 8-10 years for training that is valued at about $1 million. Now, a three-year service obligation for a measly Masters of Accounting that costs approximately $100,000 seems steep. That is about two years too long.

The concept is not new, since firms are often deceptively generous to keep their employees from quitting. I recall a senior staff level bonus policy that offered a cash bonus if you committed to staying for another couple of years. One other perk this particular program provides is protecting firms from those overtime wage lawsuits. The more education their workforce has, the more firms can plausibly argue that their employees — particularly the unlicensed ones — should be considered exempt.

And don’t forget KPMG’s been in hot water with this PCAOB leak forays. While it may blow over in 3-5 years, it may be the tip the iceberg. No wonder KPMG is looking ahead and saying, “Hey, let’s round up 135 high-performing people who can’t quit” for several years in a row. They’ll be able to take on the auditing load after everything hits the fan and the reputation is in the tank. It’s pretty genius, really.

Image: Joe Mabel/Wikimedia Commons

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