*How to Talk About Partner Compensation
Source: CPA Trendlines
The following includes excerpts, reproduced with permission, from an article by Marc Rosenberg. In it, Rosenberg lists 19 issues to discuss when addressing compensation at a retreat. Here are the first 10:
- Why is this topic on our retreat agenda?
- Are there specific aspects of this topic that the firm is struggling with?
- Regarding our pres ent system:
- What do we like about it and why?
- What don't we like about it and why?
- What do we want to do about it? Do we want to tweak the current system or start from scratch with a new system?
- Should our system be performance-based?
- Is compensation a good motivator of partner performance?
- What do we think about the relative importance of the following:
- Business origination
- Size of client base managed
- Billable hours
- Realization
- Intangibles such as teamwork, mentoring staff, loyalty
- Internal duties such as MP, committee membership, etc.
- Ownership percentage
- Seniority
- How many tiers of income should our system have?
- Interest on capital?
- Base or draw?
- Bonus?
- Which of the 12 major systems for allocating partner income makes the most sense to our group?
- If we prefer a formula, what do we think about the major flaws of such a system?
- What do we think about the practice of the better business-getters periodically transferring clients to others to free them up to do more business development? If we like this, do we buy into a system that values originated book more than inherited book?
For the complete article, read “How to Address Partner Compensation at a Retreat.”
From CPA Trendlines, February 8, 2016, cpatrendlines.com.