October 30, 2020

And Now, Let’s Compare Three Different 15-year Compensation Scenarios

By now, you've probably had a chance to meticulously dissect the two posts that illustrated what your compensation at a public accounting firm will roughly be over a 15 year period. The revelation that you can make a pretty nice living over that time span did little to convince some people that this public accounting thing is worth it. Well! Those of you that count yourselves squarely in the "I still can't believe I'm doing this shit" camp will be glad to know that one reader who did his time at PwC and has moved on to an industry job made the effort to show you what you what you could be missing:

I utilized the actual promotion timeline of my internal audit group I joined (Fortune 500 company, large internal audit practice) and noted payscale was a bit lower than what I gather our pay to be at each level.  Our group also promotes after 2-3 years at each level – I picked the slower promotion in the interest of consevativism.
This is salary only (i.e. no bonus).  From what I gather, the people staying until manager get fucked the hardest.  Not only do they not get "partner pay" – they also do not reap the rewards of a higher salary compounding upon itself.  I sure hope those bonuses make up for it, but I doubt it does when you consider the much lower quality of life.
Definitely let me know if you have any feedback – I'm curious to see what everyone has to say.  To me it looks like people should either stay until partner or GTFO early.
Let's take a looksee, keeping in mind this is just one of the gazillion options you can find outside of public accounting.
Our spreadsheet wizard has laid out three different scenarios: 1) You stay in public accounting until partner; 2) You leave (in the example, "quick quit") after TWO YEARS OF HELL; 3) You leave after SEVEN YEARS OF HELL which includes a promotion to manager. Here are the scenarios side by side:
You can see the significant jump in salary for "quick quit" at year three and also in year eight for "stay to manager," however, the growth is comparable to those in second column. If you survive public, things mosey along quite nicely, especially after making partner (partnership buy-in notwithstanding). Here is each scenario in total starting with the most glamorous:
And the most lucrative scenario:
For those of you that are easily confused, the two blank lines for this scenario consist of $47,000 and $51,700.
Same goes here – first seven lines come from the scenario one to get to the total. And finally, your line chart:
So if you're of the opinion that $96k to $120k and some change (that's less than 10% of total comp) over 15 years is life changing, then you best start examining your options, otherwise, just relax and jump whenever you feel like it.
If you're still not exhausted from splitting hairs on the last two posts, feel free to make a run at this one.

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