Posts Tagged ‘CPA-Partner-Compensation’

The complexities involved in allocating income to a group of owners is not for the faint of heart. With numerous decisions to create a plan that fairly rewards individuals for their contributions to the firm’s profits, it’s easy to fall back on what you’ve heard others doing. In some cases, those plans might work out…

There are many reasons for a sizeable spread in partner income at a CPA firm. For example, at a firm that has both a founder nearing retirement and a first-year partner, the spread would be wide. Some firms are the opposite, with two to four founding partners agreeing to share all profits equally. No spread…

Multi-partner CPA firms need to ensure the right person or people make comp allocation decisions. In addition to the mechanism used to allocate income, such as a formula or the criteria used in partner evaluations, firm owners need to specify who will determine the allocation. Sometimes that means “who’s on the comp committee,” but it…

The challenge to us Several managing partners have recently asked us what spread between the highest and lowest paid partner is appropriate. We use the term “partner” to mean equity partner. First, some facts The latest Rosenberg Survey showed the ratio of highest to lowest paid partner: Over $20M – 3.9 to 1 $10–$20M –…

Firms use compensation as a standard reward for performance in areas such as meeting billable hours expectations, performing at a high technical level, delivering exceptional client service, taking on additional training or leadership duties, or mentoring staff.    Just as importantly, firms use compensation to give employees something to look forward to. Employees are motivated to…

2022 was a year full of great accomplishments. In recent weeks we have received messages about how our clients have gained competitive advantages in recruiting and retaining talented employees; built cohesion amongst partners; and accomplished meaningful goals. To give you a quick reference of actionable hot topics from the past year, here’s a list of…

Together with Grand Valley State University in Grand Rapids, Michigan, we’re working on a research project on partner compensation to gain insights from firms with 3-20 equity partners. We are inviting owners of multi-partner CPA firms to complete a research survey regarding partner compensation. We are studying features of various compensation systems commonly found at…

Common choices are not always the best choices. Eating unhealthy food. Electing political candidates who are the most popular but not the best qualified. Doing work for clients who are unwilling or unable to pay your bills. Another example is the common decision by multi-partner firms – usually firms under $30M – to use that…