The last time we wrote about the latest happenings at Moss Adams, which was June 26, the firm was laying off 103 of the 370 employees who had been furloughed for 90 days starting in April. But we have some good news to share today from MA.
In a message to employees on Thursday, CEO Chris Schmidt said the firm “will restore the across-the-board employee compensation reductions imposed between April 24 and June 23, which averaged 10%.” So, employees who weren’t furloughed and worked during that two-month period will be reimbursed the money that was taken out of their paychecks. The reason, Schmidt said, is that Moss Adams “is in a stronger financial position than anticipated.”
The Boss of Moss told employees in mid-June (before the layoffs) that the firm was ending employee pay cuts two months early because the firm was in a position financially to do so.
Here’s the full message Schmidt sent to Moss Adams employees today regarding the firm’s financial health and the pay reimbursement:
I have some important updates I wanted to share with you about our Firm.
As you know, the Executive Committee approved our Three-Point Plan in April to navigate the economic uncertainty created by the COVID-19 global pandemic. You have all been working incredibly hard over the last four months, and our plan is doing was it was designed to do. As we shared previously, our original Plan for 2020 was $850 million in revenue. The Executive Committee, along with regional and industry leaders, have been contributing to our reforecasting process, and we are now targeting $774 million in revenue for 2020. We achieved financial results in April, May, and June that were more favorable than expected. Our financial results for July are looking promising as well. Our Firm is in a healthy financial position.
Based on our latest reforecast and our improved financial results, the Executive Committee made several decisions during their July 23 meeting:
- We will restore the across-the-board employee compensation reductions imposed between April 24 and June 23, which averaged 10%. The compensation restoration will only be paid to those employees who were working over that two-month period, and will be reflected in their August 31 paycheck.
- We will proceed with administering the annual compensation process in September, and all employees are eligible to participate in the process. Our annual compensation process usually takes place in June with increases effective July 1, but it was deferred as part of our People Plan. Increases will be effective October 1, 2020, and reflected in the October 15 paycheck.
The Firm is in a stronger financial position than anticipated due to actions taken through the Three-Point Plan. Although there is still uncertainty, we will continue to manage the Firm, and monitor the market closely as we move through Q3, and into Q4, while also projecting out into 2021.
Thank you for all you’ve managed over the last four months. I know it has been a challenging and difficult time for everyone. I’d also like to take the opportunity to welcome our furloughed employees back and look forward to all that we will accomplish as a firm together over the coming months.
As we continue to navigate the disruption and unknowns brought about by the global pandemic, we will continue to communicate with all of you. We are in the process of scheduling a firmwide town hall in early September. I look forward to providing another firm update at that time and answering your questions.
Stay safe and be well.
Moss Adams’ revenue last year was $768 million, so if Schmidt and the executive committee are forecasting a nearly $6 million increase in revenue for 2020, especially during a pandemic, the firm’s leadership is doing the right thing by giving employees back their pay that was cut. MA wouldn’t see a revenue increase if it wasn’t for them.
More accounting firms that cut employee pay should be doing the exact same thing.
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