Tag: KPMG

Bonus Watch ’11: KPMG Officially Rolls Out “Early Career Investment Bonus” Program for Senior Associates

Last month we told you that KPMG was kicking around the idea of loyalty bonuses for senior associates. Today we bring you the good news that the firm has officially announced the “Early Career Investment Bonus” which more or less amounts to a loyalty bonus.

This news was brought to Klynveldians this morning by John Veihmeyer and Henry Keizer (full memo on page 2). Let’s take a look at what the boys had to say:

Here’s how it works: If you are a current CSD senior associate with a 1, 2, or 3 rating you will be awarded $4,000 to be paid on May 15, 2013, provided you are employed by the firm on that date��������������������ut it gets better. By December 31, 2011 (just prior to the earnings period), you can elect to defer that $4,000 award for one year or two years and watch it grow:

• Defer the bonus for one additional year and receive $8,000 in May 2014
• Defer the bonus for two additional years and receive $12,000 in May 2015

And it gets better still because next year the cycle starts all over again. And, the following year, it starts again! So a typical first-year senior can look forward to three ECIB cycles with the opportunity to “layer” up to $36,000 in total bonus payments by the end of the last cycle. Alternatively, participants who are eligible for multiple ECIB enrollment cycles can choose different deferment options for each cycle, giving them theopportunity to customize the timing and amount of their ECIB award to meet their own needs or particular life events, like a down payment on a new home.

Obviously the catch here is that you’ll have to endure the next few years of your life within the House of Klynveld. But to that end, it seems like a halfway decent opportunity. Some might see this as a suicide mission but if you do in fact make it to May 15, 2015, that’s $12,000 in your pocket. John and Hank even gave us a nice example:

As this example shows, it will take a pretty huge commitment from anyone looking to score all three of the cycles for the big payout of $36,000. SIX. YEARS. AWAY. I won’t even begin to try and tell you what can happen in that time frame. Obama will have finished his second term by then (assuming re-election, obv). Countless people you know who are gigantic losers will get married, have kids and then probably get divorced. Facebook (and many people on it) will be dead. I’LL BE ON THE CUSP OF MY 40s. Get it? This isn’t exactly around the corner, people.

All told, this is a pretty progressive idea put out by KPMG and it seems better than the Above and Beyond awards which were a total flop.

So HoK, what say you? Got any career moves planned in the next two years or you sitting tight for the $12k? Anyone feel like the firm will take the opportunity to guilt those that don’t defer the bonus? Does anyone know if this in addition to any annual incentive comp? Discuss.

KPMG Loyalty Bonus

Women Attracted to Accounting Firms for Flexibility Despite ‘Old Boys’ Network’ at the Top

Our friends at Vault are curating the data for this year’s rankings to be released later this summer but they’ve got a little teaser for us that they published last week. They found that the number of women in accounting is roughly double of those in investment banking, the explanation being that “that women, more than men, seek careers with better work-life balance […] due to the fact that they’re more often than not the main caretakers of families,” as well as “offerings that the former industry provides its women in the workplace.”

According to accountants who took Vault’s 2011 Accounting Survey, their firms offer extremely generous maternity leave (and, in some cases, paternity leave); do not look down upon or punish women who take their full maternity leave; offer numerous flex-time and part-time working arrangements; and provide strong mentoring, retention, and promoting programs for women.

The finding that “[firms] do not look down upon or punish women who take their full maternity leave” and “strong mentoring, retention, and promoting programs for women” are contradictory to the recent lawsuit filed by Donna Kassman, a former KPMG Senior Manager, who has sued the firm for $350 million gender-discrimination lawsuit. Her allegations include KPMG’s “[failure] to properly investigate and resolve complaints of discrimination and harassment,” that her salary was cut when she went on maternity leave and that she was subjected to numerous instances of harassment and discrimination. Whether this one example illustrates a systemic problem is debatable as the Vault survey includes a large pool of respondents (Vault doesn’t have the tally yet) who seem to have responded positively to question of gender opportunity but the allegations are severe and are a blow to the KPMG’s (and the Big 4 at large) marketing machine of gender promotion and equality. KPMG has stated that Kassman’s lawsuit is without merit.

Despite the positive findings, the survey respondents didn’t have all good things to say. Turns out, “some” respondents believe that the leadership at accounting firms are the professional services firm equivalent of Augusta National Golf Club:

However, this doesn’t mean that accounting still doesn’t suffer from some of the same things that investment banking does. Some accountants who took our survey report that their firms are still beholden to the “old boys’ network” and, at the very top of the org chart, still consist mostly of white males.

That and “minorities and GLBT individuals are on par with those in the banking industry — that is, not so hot.”

Overall, this take on women’s fondness of the accounting industry is certainly more believable than the Times‘ piece on the culture of work-life balance since it collected responses directly from those who work in the biz rather than going to the firms for the story.

Ladies, what do you think of the results? Do you have all the opportunities of your male counterparts and the flexibility with no strings attached or do you still get the feeling that the deck is stacked in favor of the bros?

What Does the Big 4 Have That the Bulge Bracket Doesn’t? [Vault]

Deloitte Auditor Wants to Know if Joining KPMG’s IT Advisory Group Is a Good Idea

Editor’s Note: Have a question for the career advice brain trust? Email us at advice@goingconcern.com.

Hello C,

So with the new found (and welcome) love for Advisory on goingconcern.com I feel comfortable posing my question:
I am currently a 2nd year at D&T audit in Dallas, I am contemplating a move to KPMG’s IT advisory, I currently make $54k and KPMG has offered me $60k. I have some IT in my background and enjoy IT related stuff but don’t want to be stuck in Audit support as an IT Advisory Associate. KPMG has promised me the ability to move within Advisory…so here is my list of questions:

1. Would that switch be the right move for my long term career growth?

DWB:I cannot speak clearly on what your long term career growth can or cannot be without knowing what your goals are. Being that you’re two years into your career, I’m not expecting you to fully know either. That said, I suggest that you look at this in two ways: 1) what are you long term career options if you stay at DT, and 2) what are your options if you leave and enter the advisory practice at KPMG? Weigh these options with your roughly outlined career goals and take it from there. In your favor is the fact that Dallas is a larger market for both firms, so options are not as limited as they would be elsewhere.

2. Should I take the opportunity to progress towards specializing in an ERP and get more technical with IT or eventually switch to M&A/Forensics (another interest of mine).

DWB: Listen – playing first base for the Yankees is an interest of mine but it simply isn’t going to happen. I’m not saying you can’t bounce over to M&A or Forensic (drop the “s” from the name and realize they’re two separate groups at KPMG), but I am hinting at the fact that it is going to be difficult. Advisory lines of business are BOOMING right now for the Big 4, which means they have the ability to go to market and hire individuals with relevant talent. Also, should you move out of IT, that’s just one more position KPMG would have to fill as well. I’m not doubting your talents, skillset, and drive, but I don’t plan on batting clean up anytime soon.

3. What do I do after a few years of KPMG IT Advisory experience? would I be considered for Controller type (because of my Acct degree and Audit exp) jobs or only CIO career path (due to the IT tag)?

DWB: If the market dips again, prepare to fight for your current job. Advisory lines at Big 4 are the first to get slashed when the going gets tough (more discretionary lines of business, too dependent on an active client base, etc.), and IT Advisory at KPMG was slaughtered back in 2008/2009. Also, your two years of audit experience hardly prepare you to compete with senior staff and manager public accountants interviewing for the same controller roles.

4. Am I getting paid a competitive salary at $60k?

Honestly, I have no idea. Can someone in the peanut gallery chime in? What are experienced associates in Dallas making in IT advisory these days? If my gut tells me correctly, you’re a steal for KPMG. One more thing I want to harp on, although I touched on it above in #2:
“KPMG has promised me the ability to move within advisory.” This line is out of the Recruiting for Dummies. The different business lines in Big 4 advisory – as close as they may work together – are very specialized in their skill sets. Being an expert on SAS 70 reviews does not automatically make you an expert with regards to historical due diligence analysis and breaking down a company’s EBIDTA numbers.

Promotion Bonus Watch ’11: KPMG

In case you weren’t satisfied with all the talk of comp from this week. The latest from the mailbag:

Hey, I am an experienced senior in a small market, yearly performance evaluationss are coming up (July 11-20 or something), but promotes are learning their bonuses, Which are in theory a function of salary adjustments between now and October, just wondering how those are looking?

Btw, Ernst & Young peeps, you better not be holding out on us. I find it hard to believe with the fiscal year ending next week that a grip of you haven’t heard any rumors about comp. Get in touch.

Is PwC the New KPMG?

From the mailbag:

Hi Caleb,

I am considering becoming an experienced hire at PwC, however I have heard some strange things and can’t seem to get a solid angle on them. I have heard that PwC (still) doesn’t let you expense lunches when traveling. I’ve also heard that PwC is still on Windows XP with Office 2003, Lotus Notes email and using Lenovo ThinkPads. Can you please help me confirm or deny these rumors and add some color around them? Also, are there other things at PwC that I should be wary of? Is PwC the new KPMG?

Thanks,

Concerned Potential Recruit


To the best my knowledge, Concerned, I’ll address these one at at time:

1. I have heard that PwC (still) doesn’t let you expense lunches when traveling. – True. PwC does not allow you to expense lunches when traveling, although it’s my understanding that a “business lunch” is reimbursable.

2. I’ve also heard that PwC is still on Windows XP with Office 2003 – Partially true. P. Dubs is on XP but is running Office 2007.

3. Lotus Notes email – True. There were some layoffs of LN developers way back in the fall of ’09 but it’s our understanding that they still run it.

4. Lenovo ThinkPads – True. You were maybe expecting iPads? Those are for bonuses only.

5. Are there other things at PwC that I should be wary of? – I’d start here.

6. Is PwC the new KPMG? – Um, no. Unless you’re consider all the KPMG partners they’ve picked up makes it the “new KPMG.”

Former KPMG Employee Now a Bean Slinger; May Have the Best Burrito in London

It’s my understanding that burritos are hard to come by in London. Apparently they just opened the first Chipotle there. For many of you, a life without burritos slapped together in 90 seconds (not including the wait on line) isn’t a life worth living. The Brits have managed to survive for a number of centuries without tortillas overstuffed with sour cream and free-range pork. And while Chipotle can certainly churn out a fine burrito, if you happen to find yourself in Spitalfields, East London you might check out Poncho No. 8. It was started by Nick Troen and Frank Yeung, Troen being the ex-Klynvedlian and Yeung a former equities trader at Goldman Sachs.

The friends spent the next three years living together, talking about going into business one day. After a brief separation — Troen worked for KPMG, the accountancy firm, and Innocent, the smoothie maker, before doing a masters, while Yeung worked for Goldman Sachs, the investment bank — they quit their jobs, moved back in together and four months ago launched a Mexican restaurant.

Although it is early days, Poncho No. 8 (Poncho Ocho), their pocket-sized restaurant in Spitalfields, East London, employs a staff of nine, sees 300 customers a day queue down the street for “gourmet” burritos and took £100,000 in its first quarter.

Troen and Yeung are unashamedly influenced by Innocent, the wildly successful fruit drink company also started by graduate friends. “It was always a company we admired. The branding and style had a big impact on us,” Troen says.

Poncho was a typical back of the envelope idea — “we looked at the numbers and thought ‘why has no one done this?’, ” Yeung says — brought to life via the same mix of ingenious, vaguely hippy branding and healthy ingredients. The restaurant features a green-painted “Guac Shack” while the website offers a “countdown to lunch” for bored office workers.

Starting a new Mexican wave [Times via BI]

Aspiring KPMG Manager Needs Help Defecting to Another Big 4 Firm

Welcome to another round of Accounting Career Emergencies (aka: “Decide My Life For Me: GC Edition”). Today we have a KPMG Senior Associate who badly wants to make manager except for the small matter of not being able to stand her client, manager, partner and basically everything else. Jumping over to another Big 4 firm is an option but how does one convince them that you’re worthy of the new stomping grounds.

Looking for an extra edge? Concerned that your performance isn’t up to snuff and need a contingency plan? Working in an environment that makes you uncomfortable? Email us at advice@goingconcern.com and we’ll try to explain how poles and porn fit into “team building.”

Back to our Benedict Arnold du jour:

Hello dear friends at GC,

I am beginning my fourth year with audit at KPMG and would like to make it to Manager, if for no other reason than the title’s weight on the résumé. If I were to stay with KPMG and made manager in the average time frame, I would be here for another two years. To be frank, I can’t stand my client, manager, or partner and want nothing more than to quit tomorrow; I’ve already spoken to my PML (direct supervisor, basically), but there really isn’t an option for me to get out of working on this client and or this team any time soon.

My job is ok when I’m working on other clients, but this engagement is so terrible that I’m not sure I’m willing to stick it out long enough to get to my other clients. Like so many others, my primary goal is to make it to Manager at a Big 4 (have no idea if I will stay after I do, but that’s the goal at this point). There are needs for audit seniors at the other Big 4 firms in the city, and I’m thinking about jumping ship to another one. If I do this, I figure I’ll at least get a fresh start and shake things up a bit, while still working towards my Big 4 Manager goal.

So here’s the question: how do I convince another Big 4 firm to hire me? Also, if I were to get hired by the like of DT, E&Y, or PWC, could I feasibly expect to make Manager within two years? I have my CPA out of the way, so that shouldn’t be a big factor…

Help me, Going Concern. You’re my only hope.

-Big4FlipFlops

Dear Big 4 Flip Flops,

Your problem is easy, ring up PwC. They picking off KPMG people like a WWII sniper. But seriously, I’m a little perplexed by your question. When you go into an interview with any potential employer, how do you convince them to hire you? You research the company. You smile big and are ready to talk about things other than work. You discuss your accomplishments at KPMG, you play up your strengths, admit that you’re working on your weaknesses but ultimately, that you’re bringing A-1 talent to this organization and they’d DAMN FOOLS to pass up the opportunity to hire you. There will probably be a curveball question or two in the interview and those may help/hurt your chances but it’ll be a pretty standard interview.

As for your promotion timeline, I think you can safely ask your potential new firm about that without fearing any repercussions. If you adjust to the new firm quickly (e.g. new methodologies, navigating political waters) and are a performer there’s no reason you shouldn’t be considered for a promotion in another two years. Good luck and may the Force be with you.

Happy Birthday Phil Mickelson!

His Leftyness turns 41 today, as one of the favorites of the U.S. Open and of course he’ll be rocking the KPMG lid. As fans of the links know, Phil seems to come apart at the seams at the Open, not unlike certain KPMG audits. Will this year be different?

Who knows! What we do know that today is Fill’s day of birth and we send him best wishes and best of luck in the Open. Wouldn’t that be a great send off for Tim Flynn? Not that Mick needs the added pressure.

Anyway, as is (what we imagine to be) tradition for the major tournaments, T Fly and John Veihmeyer are holed up in the executive conference room watching the tournament as the rest of you are probably trying to make heads or tails of the Next Level training.

ANYWAY, leave Phil some well wishes in the comments. Don’t worry, we won’t make mention of this again, unless something hat-related occurs.

KPMG, Center for Audit Quality Weren’t Too Keen on PCAOB Inspection Documents Being Subpoenaed

Last week, we told you about Jonathan Weil’s latest scoop exposing a PCAOB issuer in an inspection report. The issuer in question was Motorola and it, once again, featured KPMG as the auditor on the receiving end of the Board’s criticism. It was also noted that PCAOB Chair Jim Doty mentioned this particular case (without naming names) in his speech at USC the previous week when he described “one large firm tam was aware that a significant contract was not signed until the early hours of the fourth quarter. Nevertheless, the audit partner allowed the company to book the transaction in the third quarter, which allowed the company to meet its earnings target.”

J Dubs put this all together in a nice little package, citing court documents from a class-action lawsuit in Chicago. What isn’t mentioned in Weil’s column but is spelled out in other court documents that we’ve reviewed is that KPMG and the Center of Audit Quality fought the release of the documents related to the PCAOB’s inspection report because they’re afraid that more lawsuits could result if issuers’ identities are made public.

The CAQ submitted an amicus curiae brief (in full on the next page) stating:

The supervisory model of regulation created by Sarbanes-Oxley and implemented by the PCAOB has thus far worked well and has improved the quality and reliability of audits of public companies. It has worked to the satisfaction of both the Board and the regulated community.

Since the PCAOB’s own Investor Advisory Group issued a report entitled “The Watchdog that Didn’t Bark … Again,” one might say that the Center’s final point is debatable.

Yet, the CAQ argued that if the PCAOB inspection documents were released, “the [Sarbanes-Oxley] Act’s carefully supervisory model will be adversely affected.” That is, the confidentiality afforded to the communication between auditors and the PCAOB would be compromised and would allow Board information into the ‘hands of litigating lawyers.’ The CAQ declined to comment for this post, saying that they did not “have anything to add to the amicus brief.”

In her ruling denying KPMG’s motion (in full, on page 3) to squash the subpoena of the PCAOB documents, Judge Amy St. Eve cited KPMG’s argument that sounds very similar to the CAQ’s:

KPMG argues that “if litigants can compel production of materials related to the PCAOB’s confidential inspection process notwithstanding section 105(b)(5)(A), open and constructive engagement between the PCAOB and accounting firms could be chilled by the threat of increased civil litigation, and the statutory framework carefully crafted by Congress to improve the quality of public company audits could be frustrated.”

So basically auditors are afraid that if their super-special-secret discussions with the PCAOB are out there for all the world to see, they’ll get sued more often. But hasn’t suing audit firms already reached critical mass? Can they really fear more litigation? The only thing that keeps audit firms from being on the same level of litigation risk as tobacco companies is that they aren’t killing people.

Weil and those that agree with him argue that the PCAOB owes it to investors to name names in their inspection reports. To continue keeping issuers confidential protects them from legitimate criticism for shoddy accounting and perpetuating equally shoddy audits. Of course, if you’re an investor and that doesn’t bother you, then maybe you’re okay with auditors trying to stop the release of more information related to their work. Work that cost the investors in Motorola $244 million from 2000 to 2010.

caqamicusbrief

Minute Order 1

Another KPMG Client Gets ID’d in a PCAOB Inspection Report

Back in March, Bloomberg’s Jonathan Weil called attention to a PCAOB report that was pretty harsh on KPMG-Bermuda’s audit of Alterra Capital Holdings. At the time he wrote the column, KPMG, the PCAOB and Alterra weren’t talking but then Alterra filed a 8-K admitting that they were the filer in question.

Today Weil lets the cat out of the bag again and yes it’s another KPMG client, Motorola:lockquote>Four years ago, inspectors for the auditing industry’s chief watchdog discovered that KPMG LLP had let Motorola Inc. record revenue during the third quarter of 2006 from a transaction with Qualcomm Inc. (QCOM), even though the final contract wasn’t signed until the early hours of the fourth quarter. That’s no small technicality. Without the deal, Motorola would have missed its third-quarter earnings target.

The regulator, the Public Company Accounting Oversight Board, later criticized KPMG for letting Motorola book the revenue when it did. Although KPMG had discussed the transaction’s timing with both Motorola and Qualcomm, the board said the firm “failed to obtain persuasive evidence of an arrangement for revenue-recognition purposes in the third quarter.” In other words, KPMG had no good reason to believe the deal shouldn’t have been recorded in the fourth quarter.

This may sound familiar to some of you that read PCAOB Chairman James Doty’s speech from last week when he said this:

PCAOB inspectors found at one large firm that an engagement team was aware that a significant contract was not signed until the early hours of the fourth quarter. Nevertheless, the audit partner allowed the company to book the transaction in the third quarter, which allowed the company to meet its earnings target. Although the firm discussed the timing of the transaction with the customer, it failed to obtain persuasive evidence of an arrangement for revenue recognition purposes in the third quarter. The company had been an audit client of the firm for close to 50 years.

Weil writes, “KPMG has been Motorola’s auditor since 1959; it had been Motorola’s auditor for 47 years at the time of the Qualcomm deal.” So, yeah. How did he piece this one together? Elementary, my dear auditors:

Motorola’s identity was disclosed in public records last month as part of a class-action shareholder lawsuit against the company in a federal district court in Chicago. The plaintiffs in the case, led by the Macomb County Employees’ Retirement System in Michigan, filed a transcript of a September 2010 deposition of a KPMG auditor, David Pratt, who testified that Issuer C was Motorola. KPMG isn’t a defendant in the lawsuit.

Pratt also identified the Motorola customers cited in the board’s inspection report. It’s his deposition that allows me to describe the report’s findings using real names.

The oversight board said a significant portion of the company’s earnings for the 2006 third quarter came from two licensing agreements that were recorded during the last three days of the quarter. One was the Qualcomm deal that wasn’t signed until the fourth quarter. The board also cited other deficiencies in KPMG’s review of Motorola’s accounting for the transactions.

As is their wont, KPMG isn’t talking. Motorola isn’t talking (but maybe there’s another 8-K in our future?). The PCAOB, bound by the law -which, some say, is debatable – isn’t talking. My guess is that Jon Weil will continue to talk…er…write columns shining the lights on shoddy audits until the Board breaks its silence.

Dirty Secrets Fester in 50-Year Relationships [Jonathan Weil/Bloomberg]

KPMG’s ‘Next Level’ Is Here and You’re Probably Going to Be Very Disappointed and/or Confused

For those of you that have been anxiously awaiting the details on KPMG’s “Next Level” like the Royal nuptials, we have the details straight from John Veihmeyer and Henry Keizer (via a couple of tipsters). Before we get to the message from The Gipper and Hank, you should be warned that if your excitement was piqued by the “Next Level” movie-trailer video, you might – MIGHT! – not be that enthused with the actual “Next Level.”

With that said, let’s turn it over to the boys:

Welcome to the Next Level: Our High-Performance Culture
A Message from John Veihmeyer and Henry Keizer

It’s no secret that we operate in an increasingly cve environment, one in which our clients—both internal and external—are demanding more from us every day. More than ever, they need the skills and services we can bring, as long as we continue to raise the bar on our own performance and add more value and insight than ever before. To meet these demands and take full advantage of the opportunities ahead of us, we must be committed to fostering a High-Performance Culture, one in which we have the best people, with the skills and determination to deliver above and beyond.

If you managed to make it through that paragraph, you’re probably queasy already. The bad news is, it gets worse.

By now you’ve likely heard about our focus on high-performance culture. But chances are you still have some questions about exactly what it is, as well as what it means for you and for the firm as a whole. That’s why we’ve created The Next Level, a Web-based orientation for all partners and employees.

This mandatory 1 CPE credit self-study program will help you to:

• Articulate the key elements of our High-Performance Culture (HPC) initiative, including why it is critical to our firm’s success and your individual success
• Describe what the firm is doing to drive HPC, as well as what’s expected of you
• Identify and model the key attributes of high performers to elevate your own performance
• Effectively use our streamlined performance development process
• Give and receive feedback more effectively
• Most important, you’ll learn how high-performance culture will help you to share in our collective firm success, build skills for tomorrow, and have pride in being part of something extraordinary.
• The deadline for completion of The Next Level is July 7. (Note: All partners and employees are required to participate in this self-study program.)

Thanks in advance for your participation! And keep in mind that this is only the jumping-off point… you’ll be hearing a lot more about our HPC efforts in the weeks and months ahead.

Okay Klynveldians, I don’t know about you all but I’m still not sure if I understand what the “Next Level” is. What is clear is there is nothing in this email about loyalty bonuses, allegations of gender discrimination or the opportunity to wear jeans (given that you’ve got a five-dollar bill in your pocket).

BUT! There is something about a “high-performance culture,” which gets its own acronym so that might be the “Next Level.” Then there’s stuff about a web-based orienation, feedback, streamlined something or other and MANDATORY PARTICIPATION FOR EVERYONE (this means you, 30+ years partner who can barely turn on your laptop). Granted, I’ve been out of the HoK for quite some time so maybe I’m misinterpreting John and Hank’s prose but this “Next Level” seems like the same “level” only with a few more hoops to jump through and definitely more emails from J&H that may or may not explain how this will “foster a high performance culture.”

If you’re more hip to this, please enlighten everyone. But if you’re confused, annoyed or mortified with disappointment you can share those feelings too.

Comp Watch ’11: KPMG Kicking Around the Idea of Loyalty Bonuses for Senior Associates

We’re still waiting to hear what the Next Level is but this should tide you over in the meantime.

I’m a second-year audit senior associate at KPMG in the New York Office. This past Wednesday there was a round-table discussion with about a dozen seniors to discuss compensation. I’ve been looking on Going Concern to see what has turned up, and since I’ve yet to see anything i figured I would send along what was discussed…

The meeting was run be a couple of our heads of compensation, and they were certain to tell us that in no way has this been approved by leadership, but as long as feedback from the round-table sessions is positive, they think it has a good chance of happening. They asked us about how the above and beyond award [Ed. note: aka utilization bonuses] was received, to which everyone responded negatively, and they unveiled their plan for future bonus compensation to reward loyalty for the firm. They said that this plan would be in addition to any raises and variable comp that the firm already has, so this would act as a reward for loyalty to the firm. I will highlight the details below.

-This plan is applicable for senior associates
– In December everyone makes an election that they classified as immediate, one-year, and two-year. The immediate pays $1,000, the 1-year pays $4,000, and the 2-year pays $8,000. This election would be made each December by senior associates. One example they gave of a first-year senior associate entering this bonus program was as follows:

December 2011: two-year election – pays $8,000 in May 2014
December 2012: two-year election – pays $8,000 in May 2015
December 2013: one-year election – pays $4,000 in May 2016

They were selling us on the fact that you would be paid out $20,000 in the span of twelve months, which of course sounds pretty great. One thing to keep in mind is that the terminology “immediate”, “one-year”, and “two-year” isn’t completely accurate. In reality it is more like one, two, or three busy seasons. Some of the particulars are that once you make an election you’re stuck with it, so if you take the immediate payout and happen to stay another few years, you are less loyal than someone who knew ahead of time. Also, if you leave the firm before you reach your payment date you obviously get nothing.

The plan was generally well received in the meeting, but didn’t get good reviews at all when I told some of my co-workers about it. I am curious to see how others feel about it. We all seemed to agree that it didn’t seem worth it to take the $1,000 payout because after taxes you’d barely notice it, and that it would take real guts to take the $8,000 payout, because as a first-year senior associate the length of your deferral is longer than your employment at the firm to date, so you never really know if you’ll still be there to collect.

Say what you will about the KPMG, they are trying to get creative with the bonus structure. Whether or not it takes with Klynveldians is another matter entirely but you can get started by commenting with your reactions below.