Category: Salaries

Current and historical data on accounting salaries, bonuses, and Big 4 compensation discussions.

Comp Watch ’11: Happy New Year’s Eve Deloitte!

It’s the final day of fiscal 2011 in GreenDotville and it seems fitting that we have a little comp discussion:

Word is coming out of the senior manager meeting last week that raises and bonuses are going to be “very good” this year. Of course, those are just rumors, and that’s what the firm said in 2009 when comp increases averaged less than 1% across the board. Other than the mid-year salary bump last fall, there have been no raises, bonuses, or any other incentives to keep slaving away since last summer.

As you may know, Deloitte moved to a decentralized audit planning approach this year, causing hundreds (if not thousands) of additional hours to be added to each engagement. With a shortage of seniors and managers as it is, it’s been close to a breaking point for everyone in the audit function. And, of course, it’s an internal mandate, so unlike the glut of work that came as a result of SOX, Uncle-D is unable to recover any of those costs from clients. Senior management is aware of the problem (Steve VanArsdell said it was the worst busy season he’s ever seen in his 36-year career), but as yet no solutions have been offered other than to say that “year 2” of the new approach should be easier.

Interestingly, the Ivory Tower here at D&T has been suspiciously quiet regarding comp and other issues. Consensus among the employees is that they’re panicked and haven’t yet figured out how to dig out of the hole that they dug for themselves over the past few years. They’ve moved up the timetable on the compensation and rating process by a couple of weeks, which means that we’ll be getting our raise and bonus information in early August instead of mid-August this year (to which, most employees have responded with, “BFD”). To most of us working here, it feels like it’s all going to be too little, too late to win back the loyalty of the current workforce here at Uncle D.

But hey, I hear PwC is hiring!

Our tipster sounds pretty glum for a NYE celebration, so if you can cheer him up with contrary rumors, please do so. Of course, you can always corroborate his suspicions if that’s what you’re hearing as well. And don’t forget to drop all your new leaders a good luck email. Everyone deserves a little thumbs-up on the first day in a new job.

PwC’s New Compensation Structure Gets the Spreadsheet It Deserves

As you know, PwC marched out a new compensation structure earlier this month and it’s been the subject of much interpretation, gnashing of teeth and even a fair amount of rejoicing. Of course, a complete analysis of this new structure would not be complete without the magic of Excel and lucky for you, a reader has taken the time to put some spreadsheet wizardy on it.

Here’s our tipster:

[Here] is an analysis of the new PwC compensation structure. It shows that the firm expects an approximate average raise of 8% per year and 16% per promotion year. The analysis also includes an approximate total compensation for each year of career progression.

I had to break up the image into two pieces so they could be readable. They appear on the next two pages.

Don’t forget that in Year 7, the bonus for promotion to manager is being phased in over three years, so that younger managers do not jump their more experienced colleagues in overall comp.

Obviously results will vary but this gives a pretty good picture of what your compensation will look like over the years at P. Dubs. If you’re busting, still not satisfied or have your own variables to add to the analysis provided, do share.

Here’s PwC’s New Comp Structure in Its Entirety (And Thoughts on Salary Multiple)

Last Friday we broke the news of the “exciting changes” to PwC’s new compensation structure. We now have obtained the document in its entirety (on Page 2 of this post) for those interested in perusing and any P. Dubbers who are unable to navigate their own email or internal websites.

The news has generated a healthy discussion with mixed reviews so far but one reader wanted to focus on the salary multiple specifically

Caleb – I think something that has been glossed over by everyone is the expectations PwC has set around salaries throughout your career.  While the attached excerpt [after the jump] shows that the firm wants you to think you will make 2X your starting salary as an average manager and 1.5X your salary as an average senior, it just doesn’t add up. 

No one is making that multiple, and most don’t think they will get there when we get raises on July 1.  Even the partners in our office said 1.5X for seniors and 2X for managers is an unreasonable salary expectation; they are also a little pissed that BoMo set such absurd expectations.  From what I heard about the associate and senior webcast yesterday, a lot of the questions were some form of “why are you a lying piece of shit about compensation?”  I haven’t had a chance to listen to the webcast yet, but I assume the answers to the questions were some sort of non-answer.

The firm has had a hard time keeping seniors around, so my best guess is they were trying to get senior expectations up to get them to stick around.  I guess they didn’t count on accountants to check those figures and do the math to make sure everything was accurate.

Well, P. Dubs new managers and SAs – do the numbers add up? Tell us in the comments.

PwCTotalRewards2011

PwC Unveils Changes to Compensation Structure

~ Note updates after the jump.

In the last week or so there has been lots of compensation news coming out of PwC, starting with the news from last Friday that “exciting changes” to the compensation structure were happening. There was a lot of speculation and up through yesterday’s Steve Beguhn capping Town Hall webcast about what those changes would be and now we’re happy to report that we’ve got the details for you.

Late yesterday we spoke to a person within PwC who helped develop the new compensati�������������������� employees and it sounds like their are plenty of exciting changes that are being unveiled today. These changes to the comp structure are part of a large shift in culture and values that all started last fall with the unveiling of the new logo (and here you thought it was all about colors and shapes). But enough with the pleasantries, you’re probably anxious to the know the details.


There are three major pieces to the change in the compensation structure starting with:

Transparency – PwC hopes to communicate to its employees just how they come up with the numbers that go into your numbers. For example, all those “surveys” and “benchmarks” that get thrown around? The firm plans to tell you exactly what surveys and benchmarks they are using, who participates in them, how many they use, etc. Once all that data is accumulated, the firm will present employees with graphs and other visuals to illustrate ranges of compensation for all the service lines and non-partner levels. They will also show the market midpoint and average vs. the PwC midpoint and average. This will allow employees to know where they are relative to their peers in terms of compensation and through an “open dialogue” in the performance review process, why they are making what they are.

Earning Potential – The next piece is your earning potential. In other words, how well you can expect to do while you’re working at PwC. From brand new associate to a new partner, you’ll be able to see what kind of scratch you’ll be pulling down at each level and in each line of service. Along with this, a new bonus structure will be announced in July for fiscal year 2012. Under this new structure, the firm will state exactly what will come out in the bonus pool; there will be no cap on the pool and it will be based on the following metrics:

Firm performance – The better PwC does, the better you can do.

Line of service performance – Yes, this means that if advisory had a kick ass year, their bonuses will be larger than the audit group’s. Likewise, the next time advisory goes through tough times and the tax group keeps on truckin’, they’ll enjoy a better bonus. Assurance, you’re just screwed (I kid, I kid).

Individual performance – The rating system relative to your peers will remain in place.

Each line of service will receive quarterly updates on the bonus pool. This is something that is already done in the advisory practice and will now be practiced in assurance and tax. All non-client facing support employees will also be eligible. The firm is launching a microsite and will provide flip books that will lay out all the details in case you ever forget all this.

Recognition and Milestone Awards – Spot bonuses have been around for some time but there was concern that it wasn’t always clear how they were earned and what they are. This will also become a more transparent process (sensing a trend yet?). Along with the spot bonuses, the firm is introducing milestone awards that will occur at the senior associate, manager and senior manager/director levels. Here are some of the details for each:

Senior Associate – In addition to compensation awards, new seniors will receive 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. UPDATE: And by “offsite,” this means “an offsite marquis location.”

Manager – New managers will receive a bonus that is equal to 25% of pay. This will be phased in over a couple of years, starting with this year’s bonus of 15%, next year 20% and finally reaching 25% in 2013. Since the promotion to manager is such a major achievement, the firm felt recognition of that achievement is appropriate. UPDATE: The reason for the phase-in is so that recently promoted managers will not be jumped in total compensation by their less-experienced counterparts. The firm looks at compensation from a total cash perspective as opposed to comparing salary to salary or bonus to bonus.

Senior Manager/Director – New SMs and Directors will receive four-week sabbaticals to use however they like. They can work to further their professional credentials, spend time with family, take a vacation, whatever they choose.

So there you have it. Some people probably won’t be pleased by the changes because well, some people simply can’t be pleased. But from the sound of it, the firm is trying to give employees what they asked for and that is more information about the process, what “staying competitive with the market” really means and probably all kinds of stuff you didn’t even think you might want to know. Again, some people will be skeptical but those people also probably think OBL is still getting dialysis treatments.

So, let’s have it P. Dubbers. Discuss the new and exciting changes and throw the questions out there that you’re too afraid to ask – TPTB are definitely reading (and it sounds like they are fans of live-blogging).

Bonus Watch ’11: PwC Gives Most of the Staff a Pat on the Back

Along with last Friday’s news of “exciting changes” coming in the compensation structure, we’ve received word a little bonus paid out PwC’s last run:

I’m a little surprised no one has emailed you about the bonuses that were paid out this last pay period to PwC associates and seniors. This wasn’t across the board to everyone like the first December bonus [Bonus Watch ‘10: PwC Holiday Payouts Coming In]. I think first years all got $500 (since they didn’t receive the first December bonus) then everyone else received a bonus that was tied to performance/utilization (and I’m told some individuals received nothing if the managers/partners thought they didn’t cut it). I’m curious what the payouts were in other markets.

I’m a second year senior in the Midwest market and got $1200. I know of another senior up for manager that received more than that. I think this is separate from whatever changes they’re going to announce this week about our pay structure. Pretty much the message I got from my partner was this was something like a down payment on the year end bonuses, which makes me believe when our year end bonuses are announced, they’re going to immediately bring up the money they gave us in December (two bonuses for some) and then this, and say that’s why our year end bonuses are lower.

The webcast is supposed to be today but we don’t have the details and haven’t heard anything yet, so keep us updated.

Comp Watch ’11: Grant Thornton Auditors Want Some Love After a Tough Busy Season

From the mailbag:

Apparently, management finally recognizes that this was a real shitty busy season and as a last ditch effort to keep hemorrhaging seniors, is going to give some large bonuses and raises. Audit is to get increased comp because of how bad it was on our side. I mean GT-Chicago lost 3 seniors right before and 3 during busy season. Plus, we had a team working on a restatement that were working 80-100 hour weeks since November. I know GT will never pay out like the Big 4, but I’m curious to see if we’re in the ballpark this time around.

Who doesn’t love aggravated Grant Thornton auditors on a Monday morning? Frankly (and I know I’m not alone here), I’ll be floored like an Animal Kingdom Superfecta ticket holder, if GT pays out like the Big 4. However, because Stephen Chipman and GT have been on such a tear the past year – shedding less dynamic offices, making dynamic acquisitions – it’s possible some at GT may see better raises this year but it I’m guessing it won’t be the audit practice.

But our tipster’s email seems fairly optimistic (in a bitter, burned out auditor sort of way) since the attrition variable seems to be in full effect. If GT SAs are indeed heading for the exits, then perhaps there will be some pleasantly surprised GT dynamos after last year’s disappointment. Keep us updated.

Big 4 Senior Associate with ‘Offers in Hand’ Wants to Ask for a Raise Without Sounding Like a Greedy Bastard

Ed. Note: Give DWB a warm welcome back to regular posting. If you’ve got a question for the advice column, email us at advice@goingconcern.com.

Good afternoon, everyone. Caleb must have tripped and knocked his sombrero-wearing-head last night, because he has invited me back for a weekly post. Regardless, I’m excited to be back. Let’s knock the rust off, shall we?

I am a 2nd year senior associate at a Big 4 firm. I like doing public accounting but am thinking that at my level and performance I am underpaid. I’ve several offers in hand but I do like what I am doing.

Now this does seem like a silly question – how do I go about asking for a raise without making it sound like that all I care about is money? In this economy…what are the chances that I am gonna get what I ask for?

Thanks a bunch!

You don’t specify whether your “several offers in hand” are for positions in the private sector or with other public accounting firms, so I’m going to address both.

Private sector – why are you interviewing with companies if you “like doing public accounting?” Turn these down.

Public accounting – you should be considering these offers if they are with another Big 4 firm. Do not go from Big 4 to mid-tier. Don’t have any offers with the other Big 4? See your own comments above and interview with the other firms. All four have problematic staffing issues this spring as the young guns continue to burn out. Sure, you’ll receive a nice little bump in pay when you transfer from one firm to another, but remember you’ll be down at the bottom of the networking food-chain.

Considering both the fact that you work at a Big 4 and it’s only a few months away from mid-summer raises and/or compensation restructuring, asking for a raise now will probably not lead to much. You work for an international firm responsible for more than 100,000 employees…you are one person. Granted, you are a second year Senior, which is one of the areas that all firms have a shortage at.

It also depends on your what practice line, your performance rankings and industry, as all of these factors play into how much leverage you will have. If you’re a top-ranked staff member with your CPA and on track to be a lead senior in the fall, your firm may toss you a $1,500 bone to keep you salivating for summer raises. If you’re more of the middle-of-the-road-and-I’m-studying-for-BEC type it would not totally surprise me if you were not given a raise or even shown the door. It would take the length of an episode of “30 Rock” for the word to spread through your office that all it took to get a bump in pay was to claim you had an offer from another firm. Leadership isn’t stupid.

Regardless of where you stand when compared to your peers, be absolutely certain you’re comfortable taking one of the offers you have should the latter situation happen. Your best bet is to wait until summer raises come through. The other firms will still be hiring experience staff in September.

Comp Watch ’11: PwC Rolling Out ‘Exciting Changes’ to Compensation Structure

This just in:

Hey Caleb,

I’m surprised no PwC’er has posted this yet. Earlier this week, Bob Mortiz hinted into “exciting changes” as to compensation structure and transparency, with details to be provided this upcoming Monday on a webcast. It might be worth posting this on your website to get some reactions from fellow PwC’ers about what this means, or to facilitate blind speculation, which is always fun.

If this communiqué from BoMo is, in fact, a few days old, we are a little disappointed it took so long to reach our inbox. Regardless, we’re grateful for the tip now and let’s get on to the important matter of speculating about what ‘exciting changes’ entails, shall we? The possibilities are endless but we’ll try to kick things off:

A. Option to receive entire compensation package (including health benefits) in Omaha Steaks.

B. Spot bonuses given to employees with abnormally high utilization who manage to not die.

C. Elevator speeches will have bearing on employees’ merit increases.

D. Outstanding individual efforts will be rewarded with the choice between a serenade from Steve Beguhn or a special appearance by the DC-area piano player for your next fiesta.

E. Various competitive poaching payouts: KPMG Partner: $10,000; All other KPMG employees: $5; Ernst & Young Banking Partners: A punch in the face; Deloitte partner: $20,000; Deloitte partner with a full head of hair: $100,000 (hey, they’re hard to come by).

F. Your ideas.

Are Accountants Willing to Trade Salary for a Four-Day Work Week?

Apparently! Our sister from across the pond has gotten over their Royal Wedding hangover to report that two-thirds of “finance professionals” would take less money if they were allowed to skip one day a week:

It seems that finance professionals are getting a taste for a more balanced lifestyle after the recent spate of bank holiday weekends. According to a recent survey, two-thirds of accountants would be happy to give up some of their salary to enjoy a four-day working week.

A survey of 2,882 finance professionals conducted by recruiter Marks Sattin found that 66% of respondents were more attracted by the prospect of a four-day working week and would be willing to sacrifice up to £11,000 a year [about USD $18k] to achieve a better work-life balance.

Only 6% said they are less attracted to a four day week than this time last year, while just over a quarter of respondents said they felt no differently.

Marks Sattin managing director Dave Way commented, “Appetite for a greater work-life balance is a sure indication that people feel more secure in their jobs. Since the recession, people have had to knuckle down and work harder. But as the economy picks up and there is less pressure on employers to make redundancies, people are increasingly prioritising a work-life balance.

Of course what isn’t mentioned is that even with a four-day work week, a number of people would just end up working longer hours on those four days and would spend a portion of their free day checking email and other various work-related activities. In the Big 4 (and the rest of the top 10-20 firms) however, there are people who are completely satisfied with the status quo and others willing to give their lives for the firm, so there’s little chance that you’ll see a big shift in culture. That said, it’s a question worth putting out there – would you take less money to work four days a week? Tell us below.

(UPDATE) Comp Watch ’11: Things Are Looking Up for KPMG Advisory

~ UPDATE: Email sent to audit professionals added to the end of the post.

How do variable increases “larger than last year for most of you and much larger for many” sound?

With the first half of FY2011 in the books, we want to provide you with an update on the firm’s and Advisory’s performance and share information about our plans for employee compensation.

We are pleased to report that the firm and Advisory are ahead of plan for the first half of the year. Advisory’s revenues have grown 18% compared to last year and our pipeline of opportunities stands at a record $1.5 billion, confirming the marketplace relevance of our services.

We have also successfully added more professionals to our team (over 800 new and ennovated high value services (including services around cloud and data analytics), acquired a strategic sourcing business (placing us No. 1 in that important piece of the market) and strengthened our training programs (through Advisory University and many targeted programs).This is great news, and a direct result of your contributions!

Further, we are confident that we can finish the year in a very strong position if we continue to work together with a sharp focus on the marketplace, our people, the profitability of our engagements (including expanding the work we offshore to KPMG Global Services), and the timely billing and collection of our receivables.

So what does this mean for compensation? As we have said in the past, our philosophy is that as the business does well, we will share those rewards with our people. And, assuming we stay on plan the remainder of the year, that’s exactly what we plan to do:

Variable Compensation and Salary Increases

Based on our strong results to date, variable compensation will be larger than last year for most of you and much larger for many. Further, we expect that approximately 80% of you will receive a variable compensation award in October. And if you are a client service associate or senior associate, variable compensation is in addition to any awards earned as part of the Above & Beyond program.

Market conditions are dynamic and will vary greatly across our many service disciplines within Advisory. Therefore the range of salary increases will also vary greatly by individual and skill set. We have increased the planned spend for salary increases as well, so increases in base salaries on average will also be better than last year. We know that rewarding and recognizing our people is critical to fostering a high-performance culture, so you can be sure that we will continue to meet our commitment to provide an attractive and competitive total compensation package that differentiates exceptional performers with superior rewards.

Accelerated Compensation Communication

To help provide you with more clarity on what you can expect in the way of compensation come October 1, in July, a leader will meet with you individually to provide you with a line of sight into what you can personally expect to receive regarding salary increase and variable compensation. (As in past years, employees promoted as of July 1, will receive a promotion bonus at that time that will be in addition to any salary increase or variable compensation effective October 1).

And we ask that each of you continue working as a team, providing the best service you can to your clients and colleagues, and helping us to drive outstanding business results. Remember, the better the business does, the better we all do.

Thanks for everything you’re doing to build KPMG’s reputation as the best firm to work with, and to contribute to our success!

Reactions are welcome at this time.

UDPATE: Henry Keizer lays it down for the audit side of the house and while rosy (nearly identical wording as noted in the comments), there’s no specific “larger” or “much larger” language which may be of concern:

With the first half of FY2011 in the books, I want to provide you with an update on the firm’s performance and share information about our plans for employee compensation.

I am pleased to report that the firm is ahead of plan for the year. This is great news, and a direct result of your contributions. And, while there is still a lot more work to do, we are confident that, working together, we can finish the year in a strong position. We have good traction in the marketplace and anticipate that the demand for our services and skills will continue to be strong.

So what does this mean for compensation? As we have said in the past, our philosophy is that as the business does well, we will share those rewards with our people. And, assuming we stay on plan the remainder of the year, this year’s compensation pool will be enhanced compared to last year.

We know that rewarding and recognizing our people is critical to fostering a high-performance culture, so you can be sure that we will continue to meet our commitment to provide an attractive and competitive total compensation package that differentiates exceptional performers with superior rewards.

And we ask that each of you continue working as a team, providing the best service you can to your clients and colleagues, and helping us to drive outstanding business results. Remember, the better the business does, the better we all do.

Thanks for everything you’re doing to build KPMG’s reputation as the best firm to work with, and to contribute to our success.

Tax people – anything to report?

Compensation Watch ’11: KPMG Transactions and Restructuring Services May Get Some Extra Love

From the mailbag:

Thought y’all might be interested in hearing about a practice specific mid-year salary adjustment announced today [Monday]. Transactions and Restructuring (aka Transaction Services/TS; 750 people nationwide) had a national update call today during which, the partner in charge, Dan Tiemann [a Top 25 Consultant, no less], announced that he is very close to having firm leadership approve a mid-year comp adjustment for up to 5% for all members of the practice.

He mentioned that he is aware of the PwC iPad program and the Deloitte midyear raises and that it’s time that KPMG (well, at least the T&R practice) did something as well. This is in addition to the staff bonus program announced before xmas, and will be in addition to merit raises/incentive comp later this year

He said he’s well aware that somebody who wants to leave for a salary bump (as myself and many of my colleagues are considering) will not be deterred by a paltry 5%, but that he thinks the practice needed to do something to “show appreciation” for those who have sacrificed weekends and vacations during the past few months.

As our tipster notes, this is not yet approved by the brass but notes that “the recent barrage of defections” may have been a motivating factor. Also, our source doubted that anything like this would occur for large practices like audit or tax, “there is hope for the rest of advisory or other specialty practices.” If you hear any hopefulness for your practice – advisory, speciality or otherwise – email us.

Bonus Watch ’10: Some McGladrey Employees Are Getting Impatient

Last month, we shared some bonus news with you courtesy of McGladrey that included a couple of extra days off (including tomorrow), access to baby/pet/parent sitters and yes, there is money involved.

Maybe because there are only less than two shopping days, some people are getting impatient:

Well, it’s the morning of our last day of work before the holiday break and employees still don’t know if they are getting a holiday bonus. It was stated to us bonuses are back but no communication has been sent out. What are they waiting for? Many people are on vacation already since we are off Thursday and Friday. Is Santa going to deliver it to each of us individually?

You think they could communicate that. Or maybe you have to be a hot shot partner to get a bonus. I for one know I will be pretty pissed off if there is no bonus, especially after the company wasted all that money on a 144-foot cake that went to waste earlier this year.

They can talk about how great we all are and what we have to do in the coming years but it’s all hogwash if they don’t give us a bonus. I know one thing, Steve Tait [former President of RSM McGladrey] would have made sure we got bonuses…will C.E.?

– Disgruntled in McGladrey Land

We have three main points here:

• Ranting about “no bonus” after a lengthy email from C.E. Andrews and Dave Scudder explaining that there would be bonuses could easily misconstrued as “psychotically cynical” but perhaps there have been broken promises in the past. If so, we haven’t been made aware of this.

• The email C.E. and Scuds stated “the pool will grow based on our year-end performance,” and “In January, we will be introducing a new program to provide real-time recognition and monetary rewards,” so maybe “nice” is virtue in Minnesota but “patience” obviously isn’t.

• We hate to break this to you but Santa Claus will not be delivering your bonus. Santa Claus is not real.