KPMG Australia auditor Kim Lawry has had many good days at the firm she joined as a graduate in 1997, but few would prove more consequential than October 10, 2023.
Leaked pay documents, obtained by The Saturday Paper, show decisions made on that day helped bring her salary that year to more than $1.4 million.
The documents explain the pay and bonus structures for KPMG’s most senior partners. They reveal that in the 2025 financial year, the firm had a final distributable pool of $366.1 million for the firm’s 49 salaried partners and $1.6 billion for its 597 equity partners.
At the top of the pyramid sat Andrew Yates, the firm’s chief executive, who resigned in May. His total remuneration package for 2024/25 reached $3.2 million.
Chairman Martin Sheppard, who left in June, was entitled to a base distribution of $1.9 million, with a maximum performance bonus of a further $778,000.
Former head of audit Julian McPherson and former chief operating officer Eileen Hoggett – both partners at a level two rungs below Yates – each received a base distribution of $1.5 million, with maximum performance bonuses of up to $755,000.
National managing partner Dorothy Hisgrove, one rung lower again, was entitled to a base distribution of $1.2 million, with a maximum performance bonus of $622,000.
Paul Rogers – the audit partner who accessed and displayed the Lendlease documents at the heart of this scandal – was on a base distribution of $526,000, with a maximum performance bonus of up to $210,000 on top.
For the partners gathered around KPMG’s most lucrative accounts, the financial incentive to win is not abstract.
It is written into every band on the partnership pay ladder, every profit distribution, every exceptional payment. It forms the very architecture of the firm.
Back to Lawry, however, who on October 10, 2023, attended a meeting with Hoggett, Rogers and other KPMG personnel.
It was not a routine gathering.
As a senior partner in KPMG’s financial services practice, with deep expertise in banking built across nearly three decades at the firm, Lawry was leading the KPMG team finalising what was shaping up as the most important pitch of her career: a bid for the Westpac external audit, worth $32 million a year in billings, and one of the most prestigious audit accounts in the country.
On this particular day, Lawry was keen to hear what Hoggett and Rogers had brought with them: intelligence gathered in the course of another KPMG engagement entirely, the Lendlease audit.
According to findings later confirmed by an investigation commissioned by KPMG and conducted by law firm Allens – first reported by The Australian Financial Review – Hoggett and Rogers had, while working on the Lendlease account, opened a restricted folder prepared for the property giant’s board audit and tender subcommittee. The Allens investigation found that Rogers and another KPMG employee had accessed the same folder two months later, in August.
The timing was significant. Lendlease had, at the time, decided that after 68 years with the same auditor, KPMG, it was time for a change.
Inside the restricted folder, the Allens investigation found, were highly confidential audit pitch documents submitted to Lendlease by rival firms EY and PwC, detailing how each priced their work, the technology they intended to deploy, and other proprietary material that could give KPMG the edge in its bid to win the Westpac audit.
Seven months later, in March 2024, Westpac announced KPMG as its new auditor.
The consequences for Lawry were almost immediate: just a few weeks later, when the firm’s national executive committee met to decide bonuses from the firm’s profit pool for the year ending June 30, 2024, she was the only partner out of about 680 considered deserving.
In a confidential slide marked “Exceptional Distributions”, KPMG’s National Executive Committee spelt out the guidelines. “The NEC retains the discretion to recommend exceptional distributions annually. Exceptional distributions apply where: the performance is HEP (Highly Effective Performance) or OP (Outstanding Performance); the scale of overachievement suggest the Partner’s financial reward under the framework would be insufficient, and; other forms of recognition such as Band progression are still not adequate to acknowledge the in-year contribution.”
The exceptional distribution slide tells the rest of the story. On top of her base and performance distributions for 2023/24, Lawry received an additional $100,000.
“We’ve seen in the partnership structure the flourishing of self‑interest over professionalism.”
Lawry was also promoted, moving from band 8 to band 9 on KPMG’s 14-rung partner pay ladder, with band 1 being the entry point and band 14 being reserved exclusively for the chief executive.
At band 9, Lawry’s base distribution for 2023/24 was $888,800, with a further outstanding performance distribution of $444,400, bringing her total earnings for the year ending June 30, 2024, to more than $1.4 million when the $100,000 exceptional distribution is included.
Lawry has since kept climbing. Promoted to band 10 for 2024/25, her base distribution rose to just over $1 million, with a maximum performance distribution worth an extra $508,000.
For the last financial year, ending June 30, 2026, Lawry sat on band 11, which comes with a planned base distribution of $1.3 million, plus a maximum performance distribution of up to $641,000.
Over the same period, while Lawry was climbing KPMG’s partner bands, a scandal was quietly metastasising inside the firm, one that nobody at the top wanted to confront but that one person, a senior KPMG executive turned whistleblower, was prepared to expose.
In late May 2024, the whistleblower filed a formal internal disclosure with Julian McPherson, then KPMG’s head of audit.
The disclosure warned that partners were systematically misusing confidential client data, including accessing restricted documents belonging to longstanding audit clients and deploying that intelligence to win new business.
Within weeks, the whistleblower faced workplace retaliation, including being stripped of client work, denied a pay rise and ultimately pressured to relocate overseas before being managed out of the firm entirely.
KPMG maintained it had commissioned investigations by two of Australia’s most prominent law firms, Ashurst and then Allens. Neither, it would later emerge, had interviewed the whistleblower, even though the whistleblower had escalated their concerns all the way to the top both in Australia and with KPMG International.
Two years later, the whistleblower turned to federal parliament’s Joint Committee on Corporations and Financial Services. Labor senator Deborah O’Neill worked to verify the information contained in the whistleblower’s disclosure before rising in the Senate on March 24 to read the whistleblower’s allegations into Hansard, using parliamentary privilege to protect herself and the whistleblower from legal action.
Initially, KPMG denied the allegations.
“While there was no evidence provided at the time to support the allegations, we have treated the matter seriously,” then chairman Martin Sheppard and then chief executive Andrew Yates said in a statement. “We commissioned two separate law firms: one to review our firm’s investigation into the claims and one to conduct its own external investigation. On the basis of what we have been provided, we have been unable to substantiate any claims of wrongdoing raised with us.”
Inside KPMG’s offices, however, panic was setting in. A new investigation by Allens uncovered another breach of client confidentiality, this time from the Singapore-owned Optus. Soon after, Yates and national head of audit Julian McPherson both resigned.
On June 3, Hoggett was removed as chief operating officer and taken off several audit accounts. Rogers was removed from the Lendlease account.
On June 19, when the firm’s senior leadership were hauled before the Joint Committee on Corporations and Financial Services, KPMG’s national managing partner for people and inclusion, Dorothy Hisgrove, revealed that in July 2025 KPMG’s employee relations conduct panel felt it had sufficient information to impose fines on Hoggett, Rogers and Lawry for accessing the confidential Lendlease information.
Those fines were originally set at $78,000, $38,000 and $38,000 respectively but were later reduced at Yates’s discretion to $40,000, $22,000 and $19,000 respectively.
The results of the new Allens investigation also appeared to contradict evidence given to the committee by KPMG chairman Martin Sheppard, who had said only “three instances” of the misuse of client data had been uncovered.
What Hisgrove didn’t tell the committee was that the new Allens investigation had revealed Hoggett and Rogers had gone much further than KPMG first realised, opening a folder of Lendlease’s actual tender documents that showed the detailed pricing, technology plans and methodology behind the rival bids.
When the details of the new Allens investigation were revealed on June 23, KPMG announced that chairman Martin Sheppard, Hoggett and Rogers would all be leaving the firm.
Lawry remains, as both a partner and a member of the KPMG Australia board.
Whether or not the firm survives in its current form remains an open question, however.
Standing alongside Senator O’Neill at a media conference on Wednesday, Assistant Treasurer and Minister for Financial Services Daniel Mulino released a Treasury options paper proposing sweeping new powers for the Australian Securities and Investments Commission to police the Big Four accounting firms – PwC, EY, Deloitte and KPMG – for the first time.
Under the proposals, firms generating more than $1 billion in annual revenue could face fines of up to $200 million for serious misconduct. The paper also flagged mandatory audit tendering after 10 years, forced firm rotation after 20 years, and the potential forced separation of audit and consulting arms into entirely distinct entities.
ASIC could also be empowered to strip a firm of its registration if a single partner failed a “fit and proper” test.
The Albanese government is separately reviewing whistleblower protections, while the Department of Finance continues to investigate KPMG’s culture and ethics.
One of the most important changes being considered is reducing the limit on the number of partners firms such as KPMG are allowed to retain.
“At the moment there can be up to 1000 partners in audit firms. One option that we’re looking at is lowering that number to, for example, 400, which would bring it into line with legal professional services,” Mulino said.
Asked why such serious problems had arisen within KPMG in the first place, Mulino was adamant that the issue was perverse motivation for personal profit.
“I think in part it goes to firms having the wrong culture when it comes to seeking revenue and seeking profit being focused on at the expense of serving clients, at the expense of living up to their professional standards. I think that is at the heart of what has gone wrong.”
Senator O’Neill zeroed in on a culture that she says needs to be disrupted.
“We’ve seen in the partnership structure the flourishing of self‑interest over professionalism,” O’Neill said on Wednesday. “That structure has allowed the flourishing of a culture that people will fight tooth and nail to keep, because it is in their financial interest to do so.”
KPMG announced on Wednesday it had settled on former SBS chief executive Michael Ebeid as its first independent chairman, although the appointment has already drawn criticism from Senator O’Neill and Senator Barbara Pocock, given Ebeid has sat on KPMG’s Asia-Pacific board since September and is a member of the local board subcommittee overseeing the firm’s fourth attempt to adequately investigate the whistleblower’s allegations.
KPMG is also said to be weighing a 20 per cent cut to partner pay for the current financial year – on top of cuts of up to 13 per cent already flagged for 2026/27. Many inside the partnership are privately forecasting a reduction in profits closer to 30 per cent, as audit, government and consulting clients continue to leave.
The damage has spread to Westpac, with the bank announcing on Wednesday that former KPMG chairman Peter Nash has resigned from Westpac’s board amid scrutiny over his longstanding ties to KPMG’s senior partners. Those ties include staying at Martin Sheppard’s home while KPMG was pitching for the Westpac audit.
Westpac is now understood to be considering retendering the $32 million-a-year audit contract that is at the centre of this saga, the one Kim Lawry was rewarded so handsomely for winning.
In September 2025, just weeks after Lawry’s promotion to band 11, KPMG Australia’s board leadership centre published a report titled “Executive Remuneration”, advising Australian boards on how to handle executive pay when regulatory breaches occur.
Under the subheading “Transparent disclosure of Board discretion” on the report’s final page, its authors recommended boards be explicit about the dollar impact of any penalty on executive pay, because external stakeholders need to understand how decisions flow through to pay.
The same report said that where misconduct was under investigation, variable pay should be withheld until the full picture was clear.