Partner Compensation

Smaller vs larger firms

There is an excellent article in the September 8 issue of Accounting Today
by Marc Rosenberg.

http://www.webcpa.com/article.cfm?articleid=28866&pg=ros

This article amplifies something I hear about regularly ie the lack of firm/partner goal setting,
evaluations and consideration of non production factors in determining partner compensation.

Below are a few of the key findings.

*Setting and achieving strategic planning goals is not usually part of the compensation
process at the smaller firms.

*Partner evaluations are only performed in 50-75% of the larger firms and 28% of the
smaller firms.

*Production metrics (book of business and billable hours) and formulas are the prevalent partner
compensation method in smaller firms whereas more intangibles are considered in larger firms.

Not mentioned is another factor that was well documented in a recent PCPS study ie the lack of
partnership agreements in a surprisingly large number of firms.

Lots of room for improvement here for sure. 

Posted by Robert Fligel, CPA on Fri, September 05, 2008 - 3:54 pm EDT

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