The South Dakota Retirement System Has Dumped KPMG

It’s been, in the words of one source, “a hell of a week” at KPMG. John Veihmeyer & Co. have been on a whirlwind communications tour, people up for promotion are getting the good/bad news and the whole summer blast thing has people soiling themselves with excitement.

Since they’ve been on such a tear, we’ll update you with a little more news out of the House of Klynveld, returning to promotion and compensation news.

First the bad news – we’ve learned from multiple sources that newly promoted SAs in the audit practice won’t be getting much of a merit increase for their new positions. The news is that the new promotees will receive an early 1.25% increase later this summer that will be followed up by another increase, although those raises will be subject to the firm’s performance in the last part of the fiscal year.

Now the good news – After hearing from a couple offices in the west, most of the SA3s that are up for the promotion to manager seem to be getting the bump. From one office in the northwest:

Despite rampant speculation about widespread non-promotion of seniors to manager, only 3 (of around 15) 3rd year seniors didn’t get the bump. One CPA licence issue, and two performance issues. Nothing out of the ordinary even in a regular year, let alone in one where the holdbacks are supposed to be so numerous that they are creating a new 4th year senior training.

The percentage of SA3s in a Rocky Mountain office that are getting promoted is a little lower with approximately two-thirds of the class getting the bump. So far, only the (un)lucky (i.e. non-promotees) ones have received the news while the new managers continue to sweat it out. For this particular office, the decision to promote/not promote was a little more confusing that its counterpart in the northwest.

Based on the information we’ve gathered, each office is essentially given a number of promotees by the boys at 345 Park and the local office leadership is tasked with figuring it out from there. Criteria for promotion to manager (as we understand it) is that 1) the eligible SA needs to be “ready to be a manager” and 2) they need a business case (i.e. have clients to serve).

In the case of this office, it sounds like this was scrapped. Rather, it was decided that historical rating was the determining factor and not the criteria we outlined above. In other words, if you received high ratings (“EP” at KPMG) as an SA1 and SA2, that was more important than whether you actually have clients to work on as a manager. If you were in the meaty part of the curve (“SP” at KPMG), despite your strong “business case” you are SOL. Our source told us that, in the past, they were always told that “my historical rating would not be a determining factor when it came to promotions.”

So basically it boils down to how your particular office is doing. If you’ve got a strong market with plenty of clients, things should go fairly smooth (with a few exceptions). If you’ve got a competitive or shrinking market, your odds of getting the bump go down, in some cases, way down.

As always, keep us updated with your office’s developments, and congratulations and good luck to the new SAs and Managers!