It has become increasingly clear that the front line of the war on audit firm oligarchs is in the U.K. While regulators and observers in the U.S. seem ambivalent about the Final Four Horsemen of the Financial Apocalypse, the British have seemed quite content to irritate the Big 4 with their Competition Commission's insistence that […]
A deckhand on Captain Jack's ship sent us a copy of an email that will either be heeded begrudgingly or completely ignored: From: [BDO Chief Technology Officer] To: [Everyone] Subject: March Madness… March Madness means many things to many people. Basketball, spring and snow in Michigan and APT & taxes here at BDO. With that […]
Now that compensation season has passed for the major firms and most of the belly aching has died down, we’ll present some thoughts from a friend of GC and a Big 4 senior manager who shared the following with us earlier in the summer.
A few of us were talking today at lunch about compensation and how we like reading how much everyone bitches about what % raise they got and what they feel they should have been entitled too. An A1 thinks they deserve a $10,000 raise, and that would make them happy, c’mon give us a break?
It is easy to understand this is a prime area to feel you have been cheated in, however, we thought it might be interesting for some net dollar co effect, for those complainers who feel they were cheated with their raise %.
Interesting idea, we thought. Our muse suggested the following assumptions: 1) 40% tax rate – federal and state combined 2) 24 annual paychecks.
Our friend/source continues:
Would be interesting to see and shed a different light on a cash pay basis what the real difference is in pay for those who think they got cheated from a 8% raise and only got 6% or something, does the $35 per paycheck really require a personal vendetta or hours of frustrated Facebook status updates? Probably not.
My guess is that on an after-tax, per paycheck basis, some of these raises are equivalent to cutting out the morning Starbucks run, or latest iTunes download.
So we decided to dust off the Excel skills and crunch a few numbers to see if our Senior Manager friend was onto something.
We took a humdrum salary of $70k and applied the 8%, 6% comparison and tabled it:
|$ Raise (Annual)||$5,600||$4,200|
BFD you say? You got a 6% raise while some clown who couldn’t audit their way out of a paper bag got 14%? Fine, we’ll take a look at that too:
|$ Raise (Annual)||$9,800||$4,200|
So let’s say you’re the average shmo with the 6% raise and your friend/sworn enemy is getting the 14%. Are you really spitfire pissed that you’re missing out on $280 a month? We’re not talking life-changing sums here. If you’re consistently average over your career, maybe this will add up but hopefully your better sense will grab ahold and you’ll either A) step up your game B) move on with your life C) eliminate the competition (not condoning violence here, just pointing out that it’s a variable in the equation and maybe that it’s an option).
Rebuttal? Agree? Let it rip.
So waaaay back in the early to mid Aughts when Ayal Rosenthal was slumming over at 300 Madison, he got a little entrepreneurial (P. Dubs auditors don’t make shit, you know) with his Dad, two brothers and a host of others. They made a little bit of extra dough ($3.7 million) by running an insider trading scheme based on various tips, some of which were related to clients that Ayal worked on at PwC.
By the grace of God, the SEC caught on to the shenanigans and busted the gang in early 2007 (was this the reason they missed Madoff, Stanford?).
For this little stunt, NYU revoked AR’s MBA after the SEC brought the charges against him. He’s now suing the University because, “the university was ‘excessive and unfair,’ and that the proceedings violated his right to a ‘fair and timely hearing’ because NYU took nearly seven months before considering his case in September 2007.”
First of all, if an academic institution gets back to you in seven months, we’d say that’s a pretty decent response time. Second, “unfair” doesn’t work on anyone.
Having said that, we know full well how hard the young lad must have worked to get that MBA, so we’re not surprised that he wants the prestigious degree back.
If NYU really wanted an airtight reason for taking his degree they should have cited his inability to dupe the SEC for less than five years. Open and shut.