Despite nearly 20 years in this business, I never fail to marvel at the adroitness of large companies at spinning what basically amount to executions at the top level of management.
Whether they refer to it as a soon-to-be-former executive spending some more time with his/her family, or choosing to “pursue personal business interests,” it inevitably means a beefy-necked security guard stood nearby while said executive tearfully cleaned out their desk, registered with their local unemployment office and embarked on the next phase of their life.
It’s not clear to me how the KPMG communications staff explained last week’s executive shakeup — if at all — to members of the Fourth Estate or even folks surfing their Web site, because the most recent release posted there is dated Nov. 7, 2003.
Not exactly what you’d label a real-time site in terms of news.
But I digress.
Last week’s shakeup at the Big Four firm saw the firm’s No. 2 man, vice chairman Jeffrey Stein, take “retirement” at the burned-out age of 49, while Jeff Eischeid, the firm’s head of its financial planning practice, was placed on “administrative leave,” according to published reports.
Another casualty, Richard Smith, the head of tax services, has assumed “different responsibilities” in that department. For those without a big business thesaurus, this is corporate America’s version of a cop or fireman being placed on “modified” duty during an investigation.
But when the heat of a searing Senate subcommittee hearing on the firm’s marketing of aggressive (read abusive) tax shelters began to give chairman Gene O’Kelley and the firm’s partners second-degree burns, most observers of the profession expected a housecleaning of some notable degree.
During those hearings, Sen. Carl Levin, D-Mich., wondered aloud if “anyone at this firm is capable of telling the truth,” when he failed to receive what he considered suitable answers to his questions.
And since Stein, a 21-year veteran of the firm with a no-nonsense management style was, not coincidentally, the highest individual in the firm linked to the pushy selling of questionable tax shelters, it was better than even money he would be the one consigned to commit corporate seppuku.
But, for KPMG the tax shelter nightmare unfortunately doesn’t quite disappear with new nameplates.
The firm also has an IRS inquiry to deal with related to its promotion of tax shelters, in addition to mounting litigation from people staring at likely audits as a result of purchasing the firm’s tax products.
But if I’ve learned anything covering business in two decades, it’s that a change in upper management doesn’t always equate to a change in culture.
And since there’s an excellent chance that most of the KPMG folks are far brighter than me, it would be interesting to see if they instill that philosophy into their culture as aggressively as they once did the marketing of tax shelters.
