Category: PwC

PwC Announces New Categories for Distinguished, Typical, Downright Piss Poor Performance

As you may have noticed, PwC has really gone on the offensive when it comes to making changes to their compensation structure. We broke all the details for you earlier this year and one reader even shared a little spreadsheet analysis for anyone who’s into that sort of thing. More recently, we reported the (unconfirmed) details of the new Senior Associate Milestone Award which includes a getaway to the Terreana Resof is swell but there are few new details that we were recently made aware of that we’ll share with you today. First off, performance categories have changed. A tipster passed along the new buckets that you’ll be fighting to get into in FY12 and who will and will not be eligible for bonus comp:

– New performance categories are “top performer,” “outstanding performer,” “high performer,” “needs improvement,” and “unsatisfactory”

– Bonus eligble for high performer or greater. Bonus levels set by Line of Service. Line of Service will provide specific details about the business performance measures, as well as target bonus ranges for staff level and ratings.

So TP/OP/HP is what you’re all shooting for if bonuses are of interest to you. Conventional wisdom would indicate that most of you will probably fall into the unexceptional “high performer” bucket and that still gets you in the money so it’s really just the rubes that are “Needs Improvement” and “Unsatisfactory” that will be bitching about how cruel and unfair life is.

It wasn’t all business, however, Bob Moritz shared his gratitude for all your ass-busting in the past year, the ass-busting going on as we speak and the ass-busting to come:

Your role in our success
Thanks to all your efforts to deliver quality, value and the PwC Experience to our clients and stakeholders, we had a very strong FY11 and we’re off to a very positive FY12. On behalf of all the partners, I want to thank you for your role in our firm’s success.

I recorded a short video to express my appreciation and talk about the continued investments we are making in you and your career success. We began making changes back in May, including introducing new career milestone awards and increasing transparency around compensation, all designed to demonstrate the value of your career at PwC — both financially and developmentally.

Now we are bringing even more clarity to the compensation conversation with enhancements to the Annual Performance Bonus Plan. These include greater predictability in your year-end bonus opportunity and quarterly updates about how your line of service is performing against its annual business targets. Watch my video and visit the Rewards and Recognition microsite to learn more. You will hear more specifics from your line of service in the coming weeks.

These changes are all based on what you’ve said is important to you. And we will continue to listen. Keep in mind, however, that the full value of your PwC career comes directly from what you put into it. The more you take ownership of your career….solicit feedback to improve your performance….utilize your success plan to take advantage of the many opportunities here to enhance your skills and develop your talents, the greater your ability to achieve your goals and grow your career with PwC.

Ultimately, the better you are, the better we do, and the greater our ability to continue to invest in you. Thanks again for your role in our success!

So, P. Dubbersteins – do you feel that there’s “more clarity to the compensation conversation”? It’s definitely clear that most people will still get bonuses, so that’s a good thing but it remains to be seen what actually comes out of all these changes. Discuss.

PwC, Crowe Horwath Sued for Colonial Bank Failure

Ed. note: Our permanently ink-stained wench is still struggling with Internet connectivity after a small storm swept through the DC area, so we now present the following post that is republished with permission from Jr. Deputy Accountant.

A-ha! I hate to say I told you so (no I don’t) but, uh, I told you so.

In August of 2009, I caught PwC digging around on my site to find out more about the Colonial Bank failure, a failure which PwC itself oversaw and maybe just participated in (if indirectly, naturally). The year before Colonial’s epic failure, PwC auditors gave the bank the all clear.

“In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of The Colonial BancGroup, Inc. and its subsidiaries at December 31, 2008 and 2007 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America,” read the opinion.

Anyway, fast-forward two years and here we are:

Colonial Bancgroup Inc (CBCDQ.PK) and its trustee filed a lawsuit against former auditors PricewaterhouseCoopers LLC and Crowe Horwath LLP, charging them with accounting malpractice and professional negligence for not catching a fraud that led to the bank’s collapse.

The complaint was filed late on Wednesday in a Circuit Court in Montgomery County, Alabama.

It also accuses the auditors of breach of contract, saying that PwC’s independent audits of its financial statements violated generally accepted accounting standards and served to conceal the seven-year fraud that drained it of $1.8 billion and left it with hundreds of millions of dollars in worthless or nonexistent assets on its balance sheet.

Can someone please tell me why the PCAOB still has a job with this nonsense going on? Furthermore, why does PwC make $13 billion a year soaking its clients with audit fees? And why aren’t the people of the United States suing the shit out of these auditors too? Colonial was the 6th largest bank failure in U.S. history and cost taxpayers $3.8 billion.

Anyone else find it funny how they call the audit service arm “Assurance”? It has nothing to do with discovering fraud or giving investors actual peace of mind that the statements they are looking at are, in fact, prepared in accordance with GAAP. Rather it is a mafia-style pay-to-play protection ring that offers clean audit opinions in exchange for cash.

Vomit. All over Dennis Nally’s impeccably polished wingtips.

Hurricane Irene Watch: PwC Encourages Employees to Prepare to Work By Candlelight

Directly from 300 Madison:

Caleb,

This is a ridiculous email, see below, that we received [Thursday] regarding the hurricane. I work at 300 Madison Ave and thought this was hilarious. Note how we are supposed to buy candles in case the power goes out but we also need to bring our laptops home so we can work from home on Monday. Sorry P Dubb but if I need plywood to protect my apt from hurricane winds, the client should understand why my deliverable is a day or two late.

Also, during the winter we constantly get emails informing us that the office ONLY closes if the governor declares a state of emergency. According to this article, Cuomo already did that but good ol’ [Metro Region Managing Partner] Brendan Dougher hasn’t sent me an email telling me to stay home.

Here’s the communiqué:

Hurricane Irene

Unfortunately it appears that hurricane Irene will make for a challenging weekend for our area and we wanted to share the following information and guidance with you. As always, the firm’s first priority is the safety and well being of its people.

US Security is in regular contact with a private weather service and will track the storm over the weekend and remain in contact with our local team. When you leave the office today and tomorrow, take your laptop with you as you may need to work from home on Monday. Please secure all work-papers and confidential information in a locked drawer, filing cabinet or in the Records Center. Depending on the damage and disruptions from the storm, we may need to adjust our office hours on Monday. Please check your e-mail or voicemail early Monday morning to obtain the latest information on the status of the office.

Actions Required

Update your personal and emergency contact information with your profile on myKcurve; this information is critical for our Crisis Assessment Team who may need to locate you after a disruptive event

Program the Emergency Hotline number [redacted] into your cellular phone and also provide the number to your family and other emergency contacts that may need to inquire about your safety and well being

Respond to any e-mails or voice messages from the Crisis Assessment Team or office contacts attempting to locate you after an event

Check your voice messages. Office announcements and crisis guidance may be shared with you through this medium

Secure all client or confidential information in a locked drawer, filing cabinet, or the Records Center before departing from work

Take your laptop and essential peripherals home with you.

Guidance to Consider at Home

Have candles and/or battery operated lighting readily available; hurricanes typically result in power outages

Have a battery powered radio available to receive weather reports and evacuation advisories

Stock food supplies that do not require cooking

Stock 2-3 days of water; one gallon per person per day

Purchase a First Aid Kit for the appropriate number of members in your home; consider liquid soap that does not require water

Identify a secure location in the home away from windows where you can locate during the storm; consider storing blankets in this area

Have plywood or shutters ready to cover windows

Remove all objects in your yard that are not secured or could be damaged by the wind

Be prepared for flooding and heavy rains

One of the best preparedness items is to stay informed. Follow news reports and read office communications. Many websites also provide comprehensive coverage and are a great resource for all of us. Should you have any questions or concerns, please contact security@us.pwc.com or call the Emergency Hotline.

So while the rest of Manhattan is bailing itself out by bucket, be sure you’ve taken the necessary precautions to hit the ground running on Monday. And take it easy on the weekend. If the electricity is out, you’ll need plenty of battery to get through the day.

Here Are the (Unconfirmed) Details on the Milestone Award for Newly Promoted PwC Senior Associates

As you may remember, we detailed PwC’s new compensation structure back in spring to much fanfare. There were lots of details but one that sounded especially interesting were the “Milestone Awards.” These are awards given to newly promoted Senior Associates, Managers and Senior Managers/Directors. Specifically for SAs, a “highly specialized individualized offsite training that will help the new seniors make decisions about their careers. This will last for 12-18 months as they adjust to their new roles and held in an offsite, marquis location.”

We now have a few unconfirmed (due to circumstances beyond our control) details for you for this “training” including the “offsite, marquis location”:

• Terranea Resort in Palos Verdes, CA (near Long Beach/LA)
• 4 days long
• For New Senior Associates promoted July 2011
• Not a training/all about fun and celebration
• Gift to new senior associates (all lines of service)
• Monday huge celebration dinner
• Small groups of 10 people
• External experts on personal finance, wellness, nutrition, etc
• Nightly fireside chats with partners
• Adventure-style activities

Weeks
1) Nov 14, 2011
2) Dec 5, 2011
3) Dec 12, 2011
4) May TBD 2012
5) June TBD 2012

Fireside chats? Like the kind with FDR? For your sake I hope Bob Moritz and/or Dennis Nally drop by for the fun, although don’t forget that Nally is done with hot yoga, so DON’T BOTHER ASKING.

And doesn’t the Terranea Resort look pleasant? It’s in California not surprisingly, since P. Dubs has had NOTHING BUT TROUBLE from the clowns in Florida. There is golf, a spa, ocean view dining, etc. etc. Here’s the photo and video gallery if you need more visuals. Of course this kind of romantic setting is perfect for romantic interludes that will allow PwC to perpetuate any incestuous master race of capital market servants they might have.

ANYWAY, it’s our understanding that these details are to be released later this month but we thought you’d like a sneak peak. Discuss your thoughts and/or envy in the comments.

Engineer Curious to Know if an Advisory Role with PwC or Deloitte Would Be a Good Opportunity

Ed. note: Looking for career guidance from a couple of Big 4 expats or our resident permanently ink-stained wench? Email us at advice@goingconcern.com.

Hello,

I have become an avid reader of your website and need your help regarding an opportunity. I have an engineering background and 5 years of experience in the heavy construction industry specifically oil & gas. In hopes to moving on to something different and possibly working as a consultant I have got a chance to work at PWC and Deloitte in a senior associate advisory role. I do know that these companies are primarily in audit but the sales pitch they gave me was that they were trying to build the Capital Projects Advisory division. Do you all think it is good opportunity?

Sincerely,
Chugga Chugga Choo Choo

Dear Chugs,

As a self-proclaimed avid reader, I hope you caught the post I did in June about the engineering consultant in a similar situation as yours. Check it out for feedback focused on what to do once you start at your new gig in a Big 4’s advisory practice.

That said, you’re asking if the chance to work at the #1 or #2 public accounting firms in the world are “good” opportunities. I follow up your question with one of my own:

If working for #1 or #2 is not a good opportunity, what more are you looking for?

So yes, they are great opportunities to jump start your career into the “consulting” slash advisory biz. Sure, they crank out audits and tax returns, but those are very different revenue generating streams than their advisory practices. To put things in more engineering terms – wary of working in the advisory group of PwC or DT because they perform assurance services is like turning down an aerospace engineering job at GE because they also make light bulbs.

Assuming the offer details are similar, look at each firm’s Capital Projects practices. Which group is more established? Have they made other external hires recently? What is each group’s current market share/focus, and what are long term plans?

Good luck with whichever role you pursue, and welcome to the Big 4 community.

Cheers,
DWB

UPDATE: PwC Decides It Doesn’t Want $1.1 Million in Free Money From Tampa After All

Contributor note: As can happen when assembling posts for a tabloid publication late at night after too many beers and not enough sleep, we bumbled some simple facts on this one. We appreciate an astute reader reaching out to correct us and will spend the remainder of the day in the punishment corner thinking about what we’ve done.

It wasn’t that long ago so all of you should still have PwC’s recent Tampa “scandal” fresh in your minds but in case you need a refresher: 390 PwC employees in Tampa were impacted by a restructuring which left some out of a job and others ih other companies. PwC fired a little under 500 IT people in Tampa (moving those jobs to an outsourcing firm in India) and that pissed everyone off so to be nice, PwC decided to hire 200 new people and build a new $78 million office smack dab in the middle of Tampa (after hiring 487 employees in Florida for FY 2011). Isn’t that sweet? Well yes, it was, but that wasn’t the problem the press had an issue with. It was the fact that PwC was going to get $2 million (give or take a few pennies) in subsidies for doing it.

That didn’t go over very well (understandably) and as of yesterday, PwC had their Tampa lawyer – one Kenneth Tinkler – shoot a quick “oops, our bad” note to the mayor and city council stating they would no longer seek the $1.1 million “in incentive payments already approved by the City and County.”

Not the kind of firm to be accused of bitching out on a big deal like this, PwC will move forward with the plan to build in Tampa’s Westshore and hopes to have its entire Tampa workforce settled in there by 2013.

“I was very surprised to hear that they were turning down the incentives,” said Tampa City Council member Mary Mulhern, who apparently exercised professional skepticism during the subsidy approval process. “But I am very glad that they have reiterated their intention to stay here.”

See, what happened was apparently the Tampa/Hillsborough County Economic Development Corporation got the facts wrong PwC fudged the facts a bit when it applied for the money on PwC’s behalf (as is standard), saying it needed the incentives to keep 1,633 jobs in Tampa. At the time, Tampa City Council members and Hillsborough County commissioners didn’t actually know the unnamed financial services firm applying for the incentives was PwC. According to the St. Petersburg Times, a written application made on the firm’s behalf said it had competing offers from South Carolina, India, Singapore and Argentina. But PwC denies that it ever planned on moving any jobs out of the area.  “We never considered moving those 2,000 jobs out of Tampa,” the firm’s Florida market managing partner Mario de Armas told the St. Petersburg Times.

Update: Mario later corrected his earlier statement by telling the St. Petersburg Times “PwC has openly communicated to the Tampa Hillsborough Economic Development Corp. that when it originally evaluated potential sites for the firm’s new Enterprise Solutions Center, the firm was considering either a short-term lease renewal in the existing building in Tampa or constructing a building in Tampa with a long-term lease commitment. Although we did not contemplate an immediate move of 2,000 jobs out of Tampa, a short-term lease arrangement inherently leaves open the long-term question as to where our Enterprise Solutions Center would be located. Instead, our decision to invest in a new building demonstrates a sustained, long-term commitment to the Tampa area. PwC was forthright and consistent in its communications with Florida’s state and local economic development officials throughout this process, and so now we are very much looking forward to our partnership with the greater Tampa community and to maintaining and potentially increasing our work force in Tampa.”

The entire letter from their lawyer is included here for your reading pleasure:

FInal Tampa Letter 8 3

There Appears to Be Some Fuss About PwC Tapping $2 million in Subsidies Once They Spend $78 million and Hire 200 People

Remember when PwC laid off 500-ish 470 people in the Tampa area last year? The townies weren’t impressed and the local press, including the St. Petersburg Times, was all over the firm about it. At the time, PwC insisted that they would create more jobs in the area to make up for things. Frankly, no one took them seriously and probably chalked it up to “something PR has to say.” So it was a nice surprise to learn that the firm is not only hiring 200 new people but they’re spending $78 million on a “build-to-suit building.”

Typically when these kinds of things happen, the local and state governments like to subsidize a bit of the project and this situation is no different. The firm is reportedly receiving $2 million but a source at PwC, who wants to keep their identity secret because DUH, told me that it’s actually closer to $1.2 million. It consists of approximately $800k and some change from the state of Florida and $1.1 million (yes, I know the math doesn’t work you twerps, so save it, they didn’t have exact numbers) from the city and county, the latter being part of the Premier Business Bonus Program.

Rather than simply say “Thank you, PwC for bestowing your autumnal hues on our otherwise hot, sticky, green and tan town…oh, and the jobs are okay too,” the Tampa Bay Businees Journal is poking around the “$2 million” in subsidies. The focus of the story caused our source to be a little perplexed since, you know, the firm is spending nearly $80 million and hiring 200 people. Not to mention the people that will build the $78 million whathaveyou. Did they think the current PwC employees were going to bring their tool belts and slap together some framing and drywall? Plus, the firm doesn’t get the $2 million $1.2 million unless they spend the $78 million and they hire the 200 people. 197 simply won’t do (I asked).

Does it make up for the 500 layoffs? Maybe not. But a story about subsidies that probably wouldn’t pay for Dennis Nally’s annual travel? There’s far more interesting things going on in Florida. I assure you.

Heresy: Dennis Nally Says Money Isn’t the Only Motivator for Recruiting Millenials at PwC

Apparently, things like “mobility” and “skill development” are important too. If you can believe that.

Having a competitive compensation base is really important. It’s [also] about how to create an environment where people want to be. This millennial generation is not just looking for a job, they’re not just looking for salary and financial benefits, they’re looking for skill development, they’re looking for mobility, they’re looking for opportunities to acquire different skills and to move quickly from one part of an organization to another. How you manage that sort of talent and how you deal with their expectations is very different from what’s been done in the past.

So I guess that means that none of the London recruits will be stuck at the Embankment Place dump. That doesn’t sound like an environment where anyone would want to be.

PwC Chairman Aims to Keep Millennials Happy [WSJ]

PwC’s New Swanky London Location Has Those Left at the Old Dump Mad with Jealousy

P. Dubs’ “More London” or “MoLo” location is reportedly quite the swinging joint but will only house half of the City’s 11,000 employees. Those left back at the frumpy office aren’t really pleased with this development and the FT reports has caused some to catch a case of “office envy”:

The aesthetic appeal [of the MoLo location] is burnished by eco-friendly credentials. PwC is also backing a nearby bistro and wine bar that will emulate Jamie Oliver by training the homeless. The firm’s staff will also be encouraged to use it. The zeitgeistiness of it all is too much for some of those stuck at PwC’s dowdier offices in Embankment Place, near Charing Cross. But relief could be at hand. [Chairman Ian] Powell revealed that the firm is in talks to redevelop the old site to give it a bit more pizzazz.

PwC staff gripped by office envy [FT]

Comp Watch ’11: Rumors of Deloitte Adopting New Raise Structure à la PwC

This just in:

I’m hearing rumblings that Deloitte might be the next in line to adopt a PwC-esque transparent raise structure. I don’t have the exact information, but I’ve heard something about making 1.5x your current salary in 3 years.

As you may remember, PwC announced “exciting changes” to their compensation structure back in May that involved three major parts: 1) Transparency 2) Earning Potential and 3) Milestone Awards. The multiple of 1.5x increase in three years is included in the roughly what PwC laid out in their “Total Rewards” document.

This seems to be a pretty typical move from Deloitte, who is notoriously conservative relative to its autumnally-hued rival. I’m sure if this plan is carried out, they’ll attempt to add in their own quirks to differentiate themselves but I’d be surprised if amounted to anything significant. If you hear any more rumors, contrary or supporting of this latest news, get in touch.

Court Finds That PwC Might Have a ‘Macho Culture’ But It Didn’t Discriminate Against a Former Partner Who Was Basically Having a Nervous Breakdown

Last year we told you about Colin Tenner who was suing PwC on the grounds of disability discrimination. If you remember, back in 2009 Tenner was told his services were no longer needed after he took some sick time due to depression and severe stress that was a result of a client he was serving and his bosses inside P. Dubs. Tenner’s fellow partners allegedly weren’t impressed by this pansyness, as one partner said “real partners don’t get sick.”

While the judge in the tribunal said that some of these partners “were clearly at the end of the queue when tact and sensitivity were being handed out,” it wasn’t enough to constitute discrimination and Tenner’s suit was thrown out.

An industrial tribunal found that while there may have been a “macho culture within the firm”, it did not accept Mr Tenner had been discriminated against. […] [T]he tribunal said there was no evidence that any of the witnesses for PWC “showed any animosity, prejudice, or intolerance to disabled persons”.

In other words, they weren’t saying “that skitzo retard shouldn’t be calling in sick.” Apparently that’s what was needed here.

PWC partner’s discrimination case is dismissed [BBC]

PwC’s Dennis Nally Reminds Everyone That Audits Aren’t Designed to Detect Fraud, Wants to Meet the Pope, Isn’t Interested in Joining You for Hot Yoga

The Financial Times published an interview with PwC International Chairman Dennis Nally over the weekend and we learn a few interesting things about DN that you probably didn’t know. For starters, he’s very aware that his firm is in a tussle for title of the largest professional services firm ON EARTH, “We’re in a real dog race to continue to sustain our leadership position as the largest professional services network in the world,” he told the FT. Of course this gives us the impression that Denny doesn’t believe that P. Dubs has relinquished the Biggest of the Big 4 title, as some other CEOs have claimed.

And as you might expect, there are various softening questions thrown around, including:

1) Leaders he admires – he wants to meet The Pope because “[Nally] seems impressed by the feat of co-ordination.”

2) Feats of strength – He practiced hot yoga to “strengthen his golf swing” but gave it up because “I found that you had a tendency to over-workout your muscles.”

Despite those little tidbits, Helen Thomas manages to get under Nally’s skin a little when she asks if “auditors should rightly find themselves in the line of fire” when fraud or “disingenuous” accounting occurs:

Mr Nally crosses his arms across his monogrammed shirt, for the first time looking a touch defensive. “There are professional standards out there [and] an audit is not designed under those standards to detect fraud,” he says, pointing out that detecting fraudulent behaviour rests on other indications including a company’s governance, management tone and control systems. “The reasons it has been done that way is because, while we always hear and read about the high-profile fraud, the number of those situations that you actually encounter in practice is very de minimis.

Notice that he doesn’t directly address the “disingenuous” accounting. Examples which might include, say, AIG and Freddie Mac, but rather addressed fraud which is easy to fall back on, since the expectations gap is so blatant (something he has mentioned before).

His statement also appears to indicate that he feels situations like Satyam are immaterial, unless by “de minimis” he intended to mean “rare in occurrence.” But, then again, I suppose semantics are also de minimis.

The man who would be biggest [FT]