[Updated with additional information.]
During the afternoon on Friday, someone posted on Reddit that CliftonLarsonAllen had announced earlier in the day 10% pay cuts to all employees. Checks out. Here’s what came through the tipline late Friday afternoon:
CLA announced this morning in a firm-wide webcast that they will be reducing all compensation by 10% starting May 1. At this time there are no layoffs expected, other than interns who would have been done in the next two weeks anyways.
We were told by another source that the 45-minute-long video was led by CEO Denny Scheppler and Chief Strategy Officer Jen Leary. The source added:
This when our local office has been asked to work 105% of our charge hour budget for the foreseeable future.
A third source told us on Saturday that owners are reducing all distributions by 25% until year end. The source added:
If CLA missed budgeted revenue by 10%, 13% or 15%, owners will recoup 15%, 10%, or 0% of their foregone distributions, respectively. If CLA misses budgeted revenue by less than 10%, owners will recoup a larger percentage of their foregone distributions and discussions among leadership will take place regarding potential reestablishment of non-owner salaries.
When I asked how they took the news of their paying being cut, the source said:
I didn’t take it very well. I appreciate not being laid off as that would mean no income, but the structure of the pay cuts means staff have little to gain from the firm as a whole doing well. Thus, the pay cut for employees is demotivating. I’ve only been able to contact two others, and they feel much the same.
CLA is the eighth-largest accounting firm in the U.S. in terms of revenue, according to INSIDE Public Accounting. The firm just ahead of them, BDO USA, also cut staff pay by 5% to 10% on Thursday.
CLAers, if you have any additional information you’d like to provide us from the webcast, email or text us using the contact info below. And if you want to vent about the pay cut or praise the accounting gods that you still have a job, feel free to light up the comment section.