How to Operate a Compensation Committee

Increasingly, CPA firms are realizing that the old compensation formulas no longer work, that performance “intangibles” need to be recognized, and that their compensation systems need to be performance-based. As a result, more and more firms are adopting compensation committees. This monograph answers the questions: What are Compensation Committees? How do they work? Why have they become so popular?

Topics include:

  • Characteristics of a good system
  • Structuring partner compensation
  • The link to strategic planning
  • Data reviewed by the CC
  • Communication is key
  • The role of partner evaluations
  • The role of the firm’s core values
  • Partner goal setting
  • Make-up of the committee
  • Examples of partner roles
  • Performance criteria for partners
  • Open vs. closed compensation systems
  • Decisions that the CC needs to make
  • Compensation Committee Timetable

 

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