Tag: Compensation

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).

Comp Watch ’11: Deloitte Auditor Has PwC Bonus Envy

From the mailbag:

Caleb,

I am reading about PWC getting some spring love in the form of a bonus, and other firms already openly discussing compensation with their employees. Apparently Big D missed that memo.

Everybody at Deloitte had a terrible busy season, that is no secret. We changed our audit methodology, and then in December the powers that be decided to do some last minute tweaking, aka destroy any hope of a bearable busy season. I am a senior working out of Boston and have been pretty busy since October. To reward my hard work Deloitte has given me absolutely nothing. There was no post audit dinner, no monetary reward, not even a free cup of coffee. I did however (and so did everyone else in Boston) receive emails from every executive partner in the NE thanking us for all our hard work, reminding us how much money we made the firm, and telling us to reward ourselves by taking some time off. Apparently being rewarded now means using our own PTO to take a day off. I have had to work both firm holidays up to now (one in January and one in April for the Boston Marathon), so I am not sure when they think we can reward ourselves by using the PTO we already earned. Usually engagement teams hand out “Applause Awards” to their people for hard work, and maybe I am just on a few teams with Ebenezer Scrooge Partners, but I think it is crazy that either Deloitte, or the Boston Office, or one of my engagement partners couldn’t scratch together a few dollars as a thank you for the long hours.

Partners and HR continue to wonder why people leave, but we are continually asked to do more and more and never rewarded for it. With the other firms opening up the piggy banks already, what are the chances that Deloitte follows suit? They missed the mark last year on the compensation, and everyone suffered as a result with the crush of seniors headed for the door. As a result they ended up giving a mid-year raise just to stem the bleeding. Are partners too busy looking to next year or playing golf at their fancy country clubs to remember the little people?

Of course our writer is referring to the PwC bonuses we wrote about on Monday. Don’t know if this is a Deloitte problem or a Boston Deloitte problem but it sounds like Green Dots in Beantown are wicked pissed. How’s your office faring? Tell us below or email us.

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.

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.

Comp Watch ’11: Follow-up on KPMG Transaction Services Midyear Adjustment

Sounds like the previously mentioned potential raises got the John Veihmeyer stamp of approval.

Follow up on the midyear comp email from last wk- srs get 4% and mgrs get 5%. Does not apply to corporate finance and restructuring. Call is still going on right now trying to sell KPMG big time and convince people to not leave

We’ve been told that the raises are effective immediately. We’ll keep you updated.

Someone Would Like to Qualify Plante & Moran’s Fortune Ranking

From the mailbag:

The firm would be a great place for a new hire and/or intern. They offer competitive starting salaries along with a great support system and culture. I don’t know exactly how Fortune determines their ranking. If they surveyed newer staff and partners, they are going to look great every time, which seems to be the case.

There are some serious compensation issues for managers. How does a base of [70k-ish] sound (with potential bonus up to a staggering 8%)? How about a [marginal raise] over a 2.5 year period while [being promoted] that same time frame? The partner:staff ratio is so upside down that it is no wonder why they try and keep managers’ salaries so low. Some of the senior partners are a joke to try and rationalize with. I did my best, but couldn’t convince them what market salary was for a manager. I told them good luck.

Earlier:
The Fortune 100 Best Companies to Work For: Plante & Moran #26 (2011)

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.

One Ernst & Young Tax Associate’s Resolution Is to Find Out If She’s Underpaid

Welcome to the good-riddance-2010-hello-busy-season edition of Accounting Career Emergencies. In today’s edition, an E&Y tax associate is considering a move to another Big 4 firm but wants to know if she’s pulling down fair scratch after “an irrevocable slip up.”

Need ideas for 2011 resolutions? Wondering how to best present strange and morbid experience on your LinkedIn profile? Looking for ideas on how to handle a client who will be less than grateful for all the hours you’ll be putting in this year? Email us at advice@goingconcern.com and we’ll have everyone kissing your feet in no time.

Back to our New Year job hunter:

Hi, I’m currently working at EY FSO NY in Tax and considering going to one of the other big 4 firms but am wondering how much the going rate is these days for hires with the MST in my market. When I initially signed on here I was offered 70k with the MST but due to a huge irrevocable slip up I’m not being paid that. Understandably if I’m going to be slaving away through a 9 month busy season with these financial clients I want to at least get paid the going-rate hence the reason I’m exploring my options. Btw, I’m a staff 2 now.


Naturally, we had to ask about this “irrevocable slip up” because we pictured something along the lines of DUI, an inappropriate email or something even more serious but unfortunately it was just a college credits issue.

ANYWAY, this problem you have – ordinarily, we’d think that you’re shopping the job scene simply because you think you’re underpaid but since your situation is special, we’ll make an exception. We asked around and 70k is right in the wheelhouse of where you should be so at the very least, it wouldn’t hurt to ask some recruiters what openings the other firms have. On the other hand, if you like working at E&Y, it wouldn’t be presumptuous to explain your situation to a performance counselor or partner, the idea being that you’re happy but because of mix-up, you’re down the pay scale compared to your peers. Do this after speaking to recruiters so you can substantiate your claim.

Keep in mind that the downside is that tax associates with a MST and FS experience are a dime a dozen in New York, so we advise moving sooner (i.e. now) rather than later (i.e. April) when all your burned out colleagues are calling recruiters. If you wait a couple of weeks, before you know it, you’re swamped with work and missing for a couple of hours in the middle of the day will look pret-tay, pret-tay suspicious. Good luck.