Category: Salaries

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

Compensation Watch ’10: Rumors at Grant Thornton as Announcement Approaches

From the depths of 666 Third Ave:

In New York:

Associates look to come in at almost $10k less than they did in 2007
Senior 3’s are looking to make almost $10k less than Senior 3’s in 2007
New Managers are looking to make almost $15k less than New Managers in 2007
Senior Managers are looking to make almost $15-20k less than Senior Managers in 2007

Raises (without promotion) are looking to be:
3% for employees rated under a 4
6% for employees rated a 4 or 5

Our source indicates that these are all rumors at this point but based on the last Communique de Chipman, the official numbers should be known soon (“early July”).

In the previous thread lots of numbers were getting thrown so who knows; maybe GT is pulling a PwC and promising low, delivering high? Discuss.

Compensation Watch ’10: PwC Starts Spreading the News in New York

It’s raining bonuses and raises over at PricewaterhouseCoopers these days. Unfortunately, all I’m seeing are news tips (monetary tips or buybacks at the bar are always appreciated). All of my sources are from the NYC office, so if you’re elsewhere in the country, please share your numbers in the comments below. Here’s what we know so far:


• Advisory/Consulting senior associate received a raise north of 18.5%. No, that is not a typo. So in the advisory practice it’s safe to assume the spread is 0% to 19% for raises this year, with the average being about 6% as reported by Caleb earlier.

• A recently promoted associate to senior associate in advisory received a 10.5% raise and a $3,000 bonus.

• Tax bonuses are being handed out now as well. Size matters in this instance, people. Cough up the details below.

This indicates that resources are being spent on what is being determined to be the right people in the right practices. Average performers should expect to receive 4-6% and take it to the bank.

Audit people, what are your numbers looking like? Email us or post your comments below. Practice/office/level are always appreciated

Thanks to everyone that is sharing information. Enjoy the weekend.

How Accountants Can Get the Salary They Want

I’ve always been a nerd.

Not a dork, a nerd. The financial services industry and its incredible economic influence (from tax structuring to secondary industries like cab drivers and event planners) has always interested me. So it should come as no surprise that I am an avid reader of the Wall Street Journal (I have the dual paper/online subscription…obviously).

There was an article in today’s edition that has to do with getting “the salary you want.” If only it was as easy as these five points. For what it’s worth, here’s my summary of, and input on, how these rules suggested guidelines if you are looking to transition out of public accounting:


• Do your research – The article makes a point to research what current salary ranges at the potential place of employment could be. Salary.com, Payscale.com, and Glassdoor.com are all mentioned. My advice – remember to do your research with grains of salt in easy reach. The greater number of employees that contribute their statistics will lead to a more accurate number. (Glassdoor.com lists PwC’s “audit associate” salary average salary as $53,358. Is that accurate? You tell me.)

• Don’t give out the first number – When you get beyond the confusion of that statement, you realize the article is referring to the pay day you would love to receive if given the job. My advice – Don’t give a number. Here’s exactly what you need to say if asked “what is your ideal salary:” “For me the role and opportunity is what is most important.”

Yes, that is a vague statement. But it is your recruiter’s job to fight for your salary; remember their pay day is dependent on yours.

• Don’t lie – Listen to your mother. My advice – this is self-explanatory. Your current salary will be verified. Lying to your recruiter about anything – most notably salary and background check details – is a way to sever ties indefinitely.

• Don’t take the first offer – The article goes back and forth about negotiating salaries, something that you won’t do if you use a recruiter. However, if you are not using a recruiter, I recommend reading this bit. My advice – People typically have two magic numbers in their head: 1) the salary they’ve dreamt of and 2) the number they really need to receive in order to commit to leaving. Be honest with your recruiter. They will fight for you, or they will talk you off the ledge of asinine expectations.

• Once that’s locked in, go for other benefits – The article pretty much shoots itself in the kidney on this one. Read it. It’s 17 seconds you’ll never have back. My advice – consider the benefits part of your total compensation. More or less vacation days? Summer flex programs? Cheaper health benefits? Better 401k? List everything out and compare with your current situation. Due to fair employment practices, companies are usually hand-tied to offering equal employees different (or “better”) benefits.

That’s all I have. Oh and for the record, the difference between dorks and nerds is simple. Dorks read the Journal with coffee. Nerds read the Journal with scotch.

Bonus and Compensation Watch ’10: Grant Thornton Delivers the Goods

Grant Thornton has been on strict radio silence lately which makes us wonder if Stephen Chipman had given up on blogging or if they had simply given everyone the summer off.

The blog remains a mystery but we do have some news on GT bonuses (the jury was out for awhile) and merit increases and it seems to be good news but extremely short on details and extremely long on Chipman prose:

Leadership announcement
Additional guidance on bonuses and compensation

On our last all-employee call, I told you that I was optimistic that the firm would award bonuses this year. I am pleased to share with you that we are now in a position to say with certainty that we will be paying bonuses for 2010.

As you know, the overall level of bonuses is dependent on our financial results at year end. We are currently working on this modeling based on our economic forecasts and will have the final numbers next month. However, I can let you know that we plan to pay the bonuses in the mid-September timeframe.

Similar to our merit increases, our bonus payments are based on our pay-for-performance philosophy, where we strive to recognize and reward individuals commensurate with performance. We’ve held this philosophy for a number of years, but could have done better executing on it. You reminded us of this in our Voice Your Experience pulse survey, and we are striving to do better. This year — and even more so going forward — we will be giving larger merit increases and bonuses to our top-rated performers to ensure greater differentiation.

Merit increases should be finalized in the next couple of weeks and your local office will begin communicating with you in early July. New compensation is effective on August 1. The increases are based on extensive market information for each of our practices and your individual contributions.

As we work to differentiate our firm through providing consistently distinctive client service, we will continue to move towards a model that rewards each of our people relative to their contributions to the success of the firm.

I’m excited about our direction as a world-class firm that truly makes a difference, and hope you are too. Thank you for all that you have done, and continue to do, for Grant Thornton.

Stephen

So whether or not this puts your anxiety to rest is another matter. Discuss and keep us updated in the coming weeks.

Credentials for Accountants: Certified Information Systems Auditor

Need help deciding what you want to be when you grow up? Check out the rest of our posts on credentials for accountants.

If you’re really into internal audits and information systems, want to make decent money and never want to worry about having to find a job, you may want to look into the CISA.


Education Requirements
None that we know of, beyond what you’d need to secure a job in the field to gain required professional experience.

Professional Requirements
CISA candidates must have 5 years of relevant experience in IS auditing, control or security work and adhere to the IASCA Code of Professional Ethics. Experience must be obtained in the 10 years before taking the exam.

CISA Exam
The exam is administered twice a year (June and December) and candidates must register no less than two months before the exam date. The exam is made up of 200 multiple choice questions that must be answered within 4 hours. The score is graded from 200 – 800 points and a CISA candidate must score at least 450 points to pass. It covers the following areas:

IS Audit Process (10%)
IT Governance (15%)
Systems and Infrastructure Lifecycle Management (16% of Exam)
IT Service Delivery and Support (14%)
Business Continuity and Disaster Recovery (14%)

The Information Systems Audit and Control Association (ISACA) sets the standards of and administers the CISA examination.

Compensation
PayScale has some interesting figures on compensation for those with the CISA and we have to say, it’s one of the more lucrative credentials we’ve covered thus far. Interestingly, GT pays its CISAs far better than P-Dubs.

Deloitte $59,942 – $86,500
Ernst & Young $60,737 – $90,757
KPMG $70,736 – $111,331
PricewaterhouseCoopers $58,448 – $97,657
Grant Thornton $56,500 – $143,400

IS Auditors make between $60,047 – $82,842 while IS Audit Managers can make up to $108,226. The money is good if you’re willing to put in the hours and pass a little more than half of the exam.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here.

Compensation Watch ’10: Deloitte Is Kicking Around Some Numbers

Last we checked on Deloitte’s compensation news, it was news of the wealth being spread around more than last year, although no one was really impressed based on the discussion that followed.

But now out of Ronaldo Fan Club HQ we’ve got an opening bid:

“It was announced at a Tax meeting last Monday that the average raise for NE Tax would be 5% this year.”


Since Dr. Phil recently said that raises weren’t going to return to “pre-recession levels” an average raise of 5% may be in the ballpark. Then again, this is only the tax practice…

Anyhoo, our source told us that reactions boiled down to:

1. After axing or transferring everybody from the Stamford, Wilton and Hartford offices, they better pay the remaining people more!

2. At least it’s more than the average of 0% last year…

If you don’t fall into either camp 1 or 2, make your opinion known. Otherwise, get back to watching your fantasy team suck.

(UPDATE) Compensation Watch ’10: Are Raises Looking Bleak at E&Y?

It’s been awhile since we’ve heard any news on the E&Y comp front but we finally received a preliminary report from one source late last week:

[Roundtables] went the same way they always go. Surprisingly, less pushback on proposed ratings for the portion I was involved in. I really think they may be scared to lose more people. Indications are raises will be low (3-5% range for most, more for 4/5 rated people) Bonuses are probably non-existent for the masses. Annoucements of promotions for other levels will be made in August (staff to senior, senior to manager, manager to senior manager) they will also do comp increase discussions then. Effective 10/1…


So despite Ernst & Young re-reassuring merit increases the 3-5% for the meaty part of the curve and no bonuses isn’t exactly what “the masses” were expecting.

That being said, this office may be catching some bad luck since we that at least one E&Y partner was confident that the raises would beat PwC’s.

Although, some lucky E&Y soldiers have seen some “spot bonuses” for their hard work but it’s not clear how widespread that generosity is.

On a marginally-related note, we’ve received word that the partner promotions were announced but we’re still trying to run down some details. Get in touch with us if you’ve got the scoop on the new partners, what you’re hearing about comp in your office and discuss below.

UPDATE, Wednesday June 16th: A couple more accountants familiar with E&Y have their own take on the comp situation:

I heard that we “we’re not going to be disappointed with raises” here at EY. I don’t know what that means. And I tend to believe, that as you posted today, 3-5%, is a more realistic view of what’s going to happen (though that’s just my own pessimism).

and that is coupled with another source, “Haven’t heard anything further on comp other than ‘moderate.’

Continue attempting to decipher the latest. As you were.

Promotion Watch ’10: Latest Details on KPMG’s New Managers

From a Klynveld Quaker:

In recent meetings with PA Business Unit leadership with all audit staff (i.e. A and SA’s), we were told that of the 32 inidivudals up for promotion to Manager in the combined three offices (Philly, Harrisburg, Pittsburgh), that 22 were officially promoted. Of the 10 that weren’t, at least 1 just came back from international rotation, and either 2 or 3 (can’t remember which) hadn’t passed the CPA exam and therefore couldn’t be considered for promotions. All raise and bonus theories were squashed (as to hard percentages), though we were told to expect some form of raise as well as variable comp at FYE.


So just a shade better than two-thirds of the Keystone KPMGers eligible for manager will be in the new manager class. As you may remember, this is pretty close to the breakdown for one office in the Rockies but a little less than an office in the northwest.

Since the firm has four months to go in its fiscal year, the fact that the local leadership wouldn’t even give a hint comes as no surprise. That said, it hasn’t stopped people from speculating about what they think the increases will be. We encourage you to share what you know, what you’ve heard, or your own wild-ass guess. And keep us updated with the latest in your office.

The Big 4 vs. Private Sector – Shoulda, Coulda, Woulda?

Happy MoanDay Tuesday, everyone.

Last week’s post about Big 4 firms lowering the bar on starting salaries in order to project artificial pay raises was well discussed in the comments section. Thank you to everyone who commented, as that’s what makes this online community vocally vibrant and a joy to be a part of.

Part of the conversation included a debate about whether it is better to begin a career in accounting with a Big 4 firm or in the private sector; two very different career paths. The question is a legitimate case of shoulda coulda woulda. The following are a few comments from the peanut gallery:


• Guest said, “Even though I was offered $55k + $5k bonus out of college for a Big 4, I was VERY close to not accepting the offer and instead going with a private firm that was $60k starting and normal hours. The only reason I went to the Big 4 was because I fell for the trap of ‘the name recognition.’ If I could go back in time, I would have chosen the private firm.”

• Another Guest crunched the numbers, “In a Big 4, you’re overworked about 20-25% more than the private sector (if not, then more). Say a Big 4 offers you $55k starting. Your “REAL” salary relative to your peers would in fact be $55,000 / 1.25 = $44k. If you lower it to $50k for a first year, that equates to a real salary of $40k.”

• Finally, 2nd Year Associate chimed in with, “Plenty of my college pals are making upwards of $10k more than I am a year and they don’t even have their CPAs. I joined public accounting to get ahead over the next 5 to 10 years but if my pay was any less I’d have skipped this route completely.”

I think it all depends on where your career is at. If you graduated in 2007 or 2008, you might be less thrilled to be on the public accounting career. The double digit percentage raises for everyone on the team that were fiercely promoted by the Big 4 campus recruiting machines have yet to materialize for you, and now you find yourself lumped into the “just happy to have a job” group. Your classmates that went the private route have been cruising on decent pay and 45 hour work weeks. Nothing good to see here; move along.

If you’re 4-8 years into your career, you’re obviously in a different place. You’ve experienced the 15% raise, climbed the corporate shuffleboard to senior staff or manager, and utilize the phrase, “when I first started here…” all too often. You’ve earned your stripes after a number of busy seasons; your desire for a new job is to be better respected by your superiors. Pay isn’t everything, but it’s important.

Throughout all of this, you’ve benefited from the resources of working at a large firm (no, I’m not talking about free dinners). The training programs have been extensive, your CPA license is paid for, and you’ve been enjoying as much of your five weeks of vacation as the firm allowed you to take. And what about having the name on your resume? Having a pedigree firm on your resume can oftentimes land you the interview; earning the pay day is up to you.

So why did you enter into public accounting? Was it because the Big 4 had a strong presence on your campus? Were private companies not offering enough? Would you change anything about your career path to this point? Leave your thoughts below.

Lowering the Bar – How the Big 4 Can Raise Morale by Reducing Starting Salaries

Last Friday’s post by Caleb surrounding the Bonus Watch at Deloitte sparked a handful of intuitive comments from GC readers.

In case you didn’t read the post and subsequent commentary, Commenter Anon51 responded to the question “what do readers suggest firms do to retain practitioners” with the following:

1. treat every team member with respect

2. you can’t just force your team to work harder year after year with fewer people and a smaller budget

3. pay 4-7 year people more, pay new hires less, so it seems there is an incentive to working harder

4. reward your people with an extra day off without having to utilize vacation time, especially after a really busy month/audit

Point 3 is bolded because it resulted in the following comment from Guest:

“That’s a really good idea, and I’m not being sarcastic. There is no reason why new hires fresh out of college need to make $59k ($55k + $4k sign-on bonus), when they would happily work for $50k. Then, a $5k bump every year would be a reward, with maybe a higher bump during promotion years…Pay disparity is a bigger issue than actual pay.”

Well said, Guest and Anon51.

I’ve said it before and I’ll say it again – the Big 4 are constantly in cahoots with one another with regards to hiring benchmarks. So I propose that TBig4PTB get together and reassess their starting salaries. Behold, a template for all Big Wigs to follow:

1. Decrease starting total packages (salary + sign on) by seven percent. Lower the bar from the get-go.

2. Now is the time – blame the decrease on “a firm wide strategic response to the economic risks of being a major player in the professional services industry. Unofficial response – did you see the DOW sink like the Titanic the other day?!”

3. Spread gap created by initial decrease in salary over the next two years. This will create an artificial sense of accomplishment and praise.

4. Send internal emails stressing the “increase in raises for well deserving employees.” Everyone cheers.

5. In three years college graduates will not know the difference; this “decrease” becomes a non-issue.

Guest’s comment that “pay disparity is a bigger issue than actual pay” can become a non-issue with very little effort. Is this fair or ethical? Mehhhhh. I personally think it would be a slap in the face to those of you who have busted your humps and sacrificed career and personal opportunities all in the name of KPDeloitterhouseErnstMG. But it certainly wouldn’t be the most desperate attempt made by one of the firms in recent memory.

Raising morale – hardly. What are your thoughts?

Does It Matter That Deloitte Left the Rest of the Big 4 in the Dust on CNN Money’s MBA List?

Can we have a show of hands who takes a list of employers published by Time Warner seriously? Fine. To hell with you; for this particular exercise we’ll assume that the list is 100% accurate.

Here’s the breakdown for the Big 4 on the CNNMoney’s 100 Top MBA Employers, Where MBA students say they’d most like to work:

#12 – Deloitte
#44 – PricewaterhouseCoopers
#45 – Ernst & Young
#75 – KPMG


So Deloitte dominates when you look at the Big 4’s performance. To put it in a little bit of perspective, Deloitte ranks ahead of The Blackstone Group and Morgan Stanley while the rest of the Big 4 rank behind the State Department.

Is this possibly due to the fact that they are the only firm to keep their consulting (not Advisory) practice in-house? Do they simply do a better job of selling their firm? Or is it possibly because male-patterned baldness is not discriminated against in leadership positions?

Or maybe we’re making too much of this. All the firms have a spot on the list and Google beats everybody’s ass with extreme prejudice, so is this one of those “it’s just a thrill to be on the list” moments, which results in the fliers all over your office and in the halls of Career Services at B-schools?

But forget all that for a minute. What’s really surprising (or perhaps not) is that the expectation of MBA graduates whose preferred field is public accounting are expecting an average salary of $59,176 for their first job after graduation. That amount is less than those for academic research ($79,590), education/teaching ($76,138), government/public service ($77,943) and “Other” ($92,110). Oh, and it’s behind “Auditing/accounting/taxation (corporate)” at $64,841. The average salary for preferred fields is $90,990.

Five years after graduation, those same graduates expect to make $92,075. Again, dead last. The average salary being $157,324.

Whether this says more about the state of the accounting profession or the firms that court those seeking accounting focused MBAs, we’re not really sure.

But in the grand scheme of things, it might just say that Deloitte’s position on the list may be – gasp – meaningless.

100 Top MBA Employers [CNNMoney]

Bonus Watch ’10: “Performers” Getting More Love at Deloitte

Last month we told you about some Deloitte partners in the Northeast that were dropping some “Applause Awards” on “strong performers,” possibly to help calm some nerves.

At that time, our sources indicated that “partners have also hinted at more money coming their way.” It now sounds like those hints are resulting in some greased palms:

[S]ome $1,000 [Outstanding Performance Awards] have been circulating in NE AERS for “performers”. Similar to the $100 applause awards for the larger segment of consultants, I think partners are trying to head off a mass exodus; not sure if the 1k will make a difference; but it does seem to be keeping people from quitting prior to hearing about their year-end comp adjustments

So regardless of what some Deloitte HR types might think, there are partners out there that are worried about people leaving and they seem to understand that throwing a little cash around does wonders for cooling some anxious heads.