Tag: McGladrey

Promotion Watch ’10: McGladrey Names 21 to Partner/Managing Director

Cake and punch all around, natch. And if you’re lucky, pictures with your McGladrey-sponsored golfer of choice.

Oct 01, 2010 – MINNEAPOLIS (October 1, 2010) — RSM McGladrey, Inc., and McGladrey & Pullen, LLP, leading providers of assurance, tax and consulting services under the McGladrey brand, recently announced the promotion of 21 employees to partner/managing director roles, effective Oct. 1.

“Our new partners and managing directors have demonstrated the power of truly understanding our clients’ needs and proactively contributing to their success,” said C.E. Andrews, president and COO for RSM McGladrey. “They display the firm’s core values of relationships, excellence and integrity every day in their interactions with clients, potential clients and with one another. It’s a pleasure to recognize their significant contributions.”

“These employees have consistently proven their ability to gain a deep understanding of our clients’ businesses, aspirations and challenges,” said Dave Scudder, managing partner and CEO of McGladrey & Pullen, LLP. “They have used this understanding to develop innovative insights and expertise unique to each client and industry that we serve.”

The complete 2010 class of partners and managing directors includes:
Name Line of Business Location
Donnovan Maginley Assurance Florida
Doug O’Connor Assurance Illinois
Linda Dehner Assurance California
Steve Gradl Assurance Minnesota
Tasha Kostick Assurance California
Wes Getman Assurance Atlanta
Allison Egbert Assurance Boston
Kevin Vannucci Consulting Connecticut
Brian Holmes Consulting Illinois
Lawrence Levine Consulting Illinois
Dean Nelson Consulting Boston
Diego Rosenfeld Consulting Boston
Rob Frattasio Consulting Boston
Greg DeVino Tax Florida
John Majer Tax Florida
Tay Reeder Tax Georgia
Phil Wasserman Tax New York
Brian Blacklaw Tax Illinois
Mindy Cozewith Tax Georgia
Rebecca Sheridan Tax Texas
Jim St. Germain Tax Boston

McGladrey Announces New Partners and Managing Directors [PRLog]

Let’s Discuss: Big 4 Merger Rumors

We have the luxury (and giddy pleasure) of receiving more crazy ass emails than the average Tom, Dick or Harriet (see: PwC Houston Partner). Some of the stories turn out to be true, some turn out to be rumors. That’s just the way things go.

One reoccurring rumor that continually keeps us guessing though is that of a mega-merger among a Big 4. Frankly, we take a agnostic approach to these rumors (that’s probably shocking for some of you) but they never fail to pique our curiosity. You can drop us a line with your wild-ass theory about tri-firm merger between KPMG, Moss Adams and Baker Tilly to form MGMT but we can probably debunk it with a couple of emails and phone calls. Plus, the firms will deny ’til they die on any of these rumors anyway.

EisnerAmper is a perfect example.


They played coy with rumors around their merger for about a week and didn’t roll out the BIG NEWS until Monday when they could issue their boilerplate press release on cue (the video was a nice touch, however).

Lots of accounting firms are looking to grow through combinations or purchases in this impotent economy (WeiserMazars, Marcum & UHY, hosts of regional combos) but are the Big 4? Our intuition says no but the rumor mill provides us with whispers of talks occurring between the largest firms.

It’s not completely unheard of for the largest firms, as is evidenced by McGladrey’s purchase of Caturno & Co. that C.E. Andrews was so excited about in his interview with the Minneapolis Star-Tribune’s. Also, Barry Salzberg told the Journal that Deloitte is actively looking (granted, it’s for the consulting practice) but these are small potatoes.

No, the stuff we hear about has a Big 4 firm going with a second tier firm to either leapfrog other Big 4 firms or to inch closer to them. The difference between PwC (#1 in global revenues) and KPMG (#4) is around $6 billion. Depending on how aggressive a firm wanted to be in its merging efforts, the gap could be close quickly or a new #1 could be crowned.

But forget about revenues and the auspiciousness of the being the biggest firm for a second. Can a Big 4 firm realistically merge in a second tier or top 10 firm successfully? Never mind the logistics of office location, files, people etc. What about culture? What about service methodologies? The mere thought of matching up those pieces is a mind job for the people that actually have to deal with them. The bigwigs at the top might play off the problems that such a transaction would create for those in the trenches. Make adjustments would take years.

But it’s been done! Coopers & Lybrand and Pricewaterhouse in ’98 being the most recent. KPMG and E&Y tried it in ’97 and failed so it’s unlikely that the idea of another huge merger doesn’t cross people’s minds every once in awhile.

So let’s talk this out. Are these rumors completely unfounded or are is it understood that there are talks ongoing? If they are rumors, where the hell do they come from and what’s the motivation to spread said rumor? People in the know are encouraged to bestow wisdom in the comments and get in touch with us. And if you’re a vet from a merger of any size, share your thoughts on the experience and how your firm handled it.

McGladrey’s Andrews: ‘We’re Doing Pretty Well’

The Minneapolis Star-Tribune recently did a sit-down with McGladrey President C.E. Andrews and from the sounds of it, C.E. is pret-tay, pret-tay, pret-tay pleased with how things have gone at Mickey G’s since he’e been on board saying, “We’re doing pretty well.”

Now the particular context of this statement could be taken a number of waerring to the recent acquisition of Caturno & Co. or he could be talking about the firm’s recent rebranding that involved plenty of refreshments, or he’s just pumped to get regular photo-ops with Natalie Gulbis OR it could be that he’s subtly referring to how good McGladrey is at layoffs.


Based on what we read, it’s most likely the handing out of sugar stimulants:

“Big companies tend to be inwardly focused. You drink your own Kool-Aid,” said Andrews, who knows something about large companies. He’s a former partner at Arthur Andersen and had a front-row seat for the demise of the consulting firm in the wake of the Enron debacle, then went on to run Sallie Mae before joining McGladrey.

The restructured McGladrey has just five people overseeing the revenue side of the business, and a system that rewards managers who improve client service and produce growth “rather than for internal things,” Andrews said. “We’ve gone from a local measurement system to a national measurement system.”

No real room for misinterpretation there. As you all know, drinking Kool-Aid isn’t something that McGladrey takes lightly.

But then again, maybe he is referring to the recent acquisition of Caturno. C.E. is thinking that it’s been a pretty solid move and there is more where that came from:

“This thing has the appearance of being as good a fit as anything I’ve ever been a part of,” Andrews said. He said each firm had strengths that the other lacked in the New England region. It’s a model for the kinds of acquisitions McGladrey is looking to make, he said.

That includes San Francisco — though Andrews said nothing’s teed up yet.

This rhetoric is strange if you consider the aforementioned layoffs, some employees considering dumping Mickey G’s for Mickey D’s and a disappointing year where the firm saw a 39% drop in its pre-tax income.

But despite all that, C to the E has big plans for McG and they don’t include keeping things local:

McGladrey offers prospective targets connections to RSM International, the sixth-largest network of independent accounting, tax and consulting firms, Andrews said. That’s becoming more important in today’s economy when even midmarket firms — which he called McGladrey’s “sweet spot” — now have operations in far-flung places like China or India.

“The attractiveness of truly local providers is diminishing,” Andrews said.

BUT! Don’t you go thinking that McGladrey will be like one of those firms, “We have the same kind of capabilities as the Big Four [accounting firms] … but delivered with an outstanding local touch.”

So, he backhands the local firms but then casually embraces their ‘delivery’ to take a jab at the Big 4. So, if we understand this correctly, McGladrey is a big firm, but isn’t like a big firm, and that’s their advantage. Got it.

McGladrey seeking more acquisitions [Minneapolis Star-Tribune]

Sometimes Billionaires Get Bad Tax Advice, Just Like Us!

It’s probably safe to say that billionaire hedge fund manager Leon Cooperman doesn’t get poor service very often. As the founder of Omega Advisors and #655 by Forbes‘ last count, the man has arguably earned the right to demand only the best, especially when it comes to something as important as tax services.

Howthat Cooperman is just the latest billionaire to have tax issues (McCombs, Anschutz have had troubles recently) that might cause a less prudent mega-rich person to flip their lid (e.g. Ted Turner, Steve Jobs).

Cooperman recently received a letter from the IRS informing him that despite the generous gift of $43 million to his own foundation, the contribution could not be allowed because the donation was a non-marketable security made to a private foundation, which is not allowed by the IRS. Had he made the donation to say, NORML (he looks like he could get behind it, couldn’t he?), or some other public charity everything would have been hunky-dory.


Unfortunately for Mr Cooperman, this isn’t the case and the IRS sent him a bill for $14 million in back taxes and $5 million in penalties. Understandably, this aggression will not stand and the “plain-speaking” Coop has taken the case to court to insist that he relied on his accountants to get this shit right. It’s complicated, after all. It’s not about the money, it’s the principle. Coop would gladly schlep in suitcases of consecutively numbered hundos to settle this here and now but the penalties are uncalled for and he’s bound and determined to prove that. But who actually is to blame?

The lawsuit says Cooperman’s two personal returns claiming the deductions were prepared by his longtime accountant, Mark I. Gittelman, a CPA with Gittelman & Co., Clifton, N.J. The formal appraisals to support the claimed deductions were done by RSM Business Services and Duff & Phelps, Cooperman’s suit adds.

[…]

McGladrey does tax work for other Cooperman entities, including his hedge fund, Omega Advisors. Cooperman told Forbes that McGladrey knew he was planning to donate a nonmarketable security to his private foundation and take a deduction when the firm rendered its appraisal for a fee that Cooperman said was about $20,000.

Again, the money isn’t important but for crissakes, McGladrey, you just don’t half-ass your work for Leon Cooperman. Forbes was all over this issue back in ’04. Where were you in 2004? Stumping for John Kerry?

Of course we all know where this is eventually going – litigation! When rich people get wronged, someone inevitably pays and it sounds like LC is happy to sit tight and let the tax court do its thing. Once that’s resolved, he’ll turn his sights towards the responsible parties:

Cooperman clearly is thinking about malpractice litigation. He acknowledged McGladrey is likely to assert it didn’t prepare or sign the tax returns with the disallowed deductions, although the firm’s formal appraisal was attached.

Best of luck to everyone involved!

Billionaire Leon Cooperman: I Got Bad Tax Advice [Forbes]

Compensation Watch: McGladrey < McDonald's?

One unhappy Mickey G’s employee would like to get something out there:

Now that salary adjustments have been communicated to employees, many are griping at McGladrey – and for good reason.

More than a few people are grumbling about the recent golf signings and ridiculous sports marketing platform as well as the fact the company spent money on a 144-foot cake, but only gave thousands of people 1 to 3% raises.

Combined with the fact that no one got raises last year, and with inflation, rising costs of benefits and everyday living expenses, well, many employees are not too happy about this slap in the face. Let one thing be said, if you are not looking out for yourself with this company, then you are doing yourself a disservice. The company doesn’t care about you, they only act like they do.

The great place to work platform is BS – it’s a marketing crock.

McGladrey? Heck, I’d rather be McLuvin and at work at McDonald’s…they treat employees better.

Earlier:
Compensation Watch: McGladrey Promises That the Good Times Will Keep Coming
Compensation and Promotion Watch ‘10: Discussions at McGladrey Starting Soon; Forced Ranking in Effect?

Compensation Watch: McGladrey Promises That the Good Times Will Keep Coming

Just last week we learned that compensation discussions at McGladrey were going to be occurring in the coming days and weeks and it appears things got rolling right away and there are even some numbers to report:

We just received correspondence from national regarding our Firms performance and a cryptic breakdown regarding upcoming comp discussions [memo after the jump].

Furthermore, they have begun the comp discussion process in the southeast. Apparently the partners received official compensation breakdowns for each employee either Wednesday or Thursday of this past week. A newly promoted senior itheir discussion already and he received a 11% raise and $1k bonus.

To circle back to correspondence from C.E., I think it’s particularly insulting that he mentioned that “this year, as in previous years, we will continue to follow a “pay-for-performance” approach when it comes to individual compensation”; Interesting how there were people who received 5s last year who received a 0% raise in 2009, and those promoted received what amount to an inflation adjusted raise-just under 4%.

So 11%/1%? Thoughts anyone? If you’ve received your numbers, report below.

It’s also worth noting the following from C to the E and Dave Scudder, “In spite of a very weak economy, we held our own. We had several unique one-time charges that impacted our profitability (see Rene’s financial update on The Point for more details). Without these, our pre-tax margin would have been essentially flat with last year.”

So “we had a pretty solid year if you ignore a few major things,” is more or less an echo from the H&R Block press release that we saw late last month. In case you forgot, those one-time charges include costs associated with the little divorce and reconciliation between RSM McGladrey and McGladrey & Pullen as well as a goodwill impairment charge.

Despite the tough year, leadership assures everyone that the good times will continue to roll at Mickey G’s, “You’ve seen a number of exciting announcements in the last month, and let us assure you that the good news is going to keep coming.” In other words, more golfers that aren’t Natalie Gulbis and plenty of refreshments.

McGladrey Comp

One McGladrey Office Opts to Celebrate the Rebranding with a Cult-like Ritual

Leftovers of the freakishly repulsive cake that McGladrey rolled out for its rebranding was apparently not shared with other offices because the crew in Phoenix/Las Vegas took it upon themselves to come up with another method of celebration.

“After we returned from brand champion training in Orlando, the three of us met to brainstorm for ideas to make our local brand launch fun and memorable. We wanted to focus on more than just the launch. We wanted employees to know that a brand launch is only successful if the brand becomes part of everything they do.”

What exactly was the idea? Another cake? A surprise appearance by Natalie Gulbis? Keeping your jobs?


No, the creative minds in Phoenix/Vegas decided that gathering everyone together and asking them to drink blue Kool-Aid™ was the best way to show everyone that they are in this together. DO OR DIE.

“Asking employees to ‘drink the McGladrey Kool-aid’ sends the message that we all need to be in this together,” says ——. “And there’s no opting out if we’re going to make this effort a success.”

Pardon what is about to follow but…WHAT. THE. FUCK? Forget about the literal manifestation of a corporate metaphor, which is all sorts of lame (no on is schlepping an 800 lb. gorilla into HQ, are they?). Ever heard of Jonestown? Aren’t we all just a little too trusting with this “drink this” attitude? “Hey, just drink this Dixie cup that’s full of what we say is blue Kool-Aid™ because it will bring us all together.”

And you know how they got a lot of people to get on board with this? FREE T-SHIRTS!

“As an added incentive, employees who drank McGladrey Kool-aid from a Dixie cup received their very ownMcGladrey t-shirt.”

All we can say is, don’t walk but run away.

7-9-10 Drinking the Koolaid Article-2

McGladrey to Give Money to Another non-Natalie Gulbis Golfer

Hell, they did even go with another woman. They figured making Davis Love III the third dude golfer to be sponsored by McGladrey was the best route.

Although no terms were disclosed on DL-cubed’s deal, we’re guessing it’s a decent deal, not Phil Mickelson money mind you, but he won’t be starving either.


And DL3 is pretty flippin’ pleased to be the third amigos, “Following the great work McGladrey has done with the Davis Love Foundation, it was a natural progression for me to join Team McGladrey and proudly support their brand in the way they’ve supported my Foundation. It was great to kick off my new sponsorship with McGladrey in style with a good showing at the U.S. Open, and I look forward to continued success on and off the course as a member of Team McGladrey.”

Likewise, C.E Andrews is pumped to have a 3rd join the team “Davis and the rest of our Team McGladrey Foursome demonstrate the values of integrity, excellence, understanding and teamwork – values that mirror our company’s approach to serving and understanding our clients.”

[caption id="attachment_13910" align="alignright" width="260" caption="All alone in the boys club."][/caption]

Unfortch for all of us, D Love stayed on script and didn’t mention Natalie Gulbis specifically which just reeks of a “bros before hoes” mentality. If McGladrey wants to sponsor a boys club, that’s their business but you can’t tell us that adding another lady on the team wouldn’t have worked just as well, if not better. Oh well. We’re sure Natalie will enjoy watching the three dudes ice each other at the joint appearances.

McGladrey Inks Deal with PGA TOUR Veteran Davis Love III, Makes Team McGladrey a Foursome [McGladrey]

Compensation and Promotion Watch ’10: Discussions at McGladrey Starting Soon; Forced Ranking in Effect?

[caption id="attachment_13722" align="alignright" width="260" caption="Has she gotten her updated gear yet?"][/caption]

It sounds like the capital market servants at the firms formerly known as RSM McGladrey/McGladrey & Pullen will finding out their good/bad/tremendously underwhelming news about comp and promotions in the coming week(s).

That and it sounds as though Mickey G’s is warming up to the forced ranking system that has been plaguing the Big 4:

Just wanted to pass a bit of info across to you about McGladrey comp discussions. They communicated to us in an email last week that all ratings and promotion decisions are now final and will be communicated to us no later than July 23rd.

Also, I’m based out of the the southeast and they told us that about 25% of people were initially rated 5s (our highest rating) and that they had to downgrade peoples ratings to in line with the 10% to 15% bell curve range. I have this from a direct source of a director inside the “roundtable” meetings or whatever they’re calling them now. Not sure if this is a nationwide occurrence.

We don’t know if the downgrades are standard operating procedure at the firm but one would think that the layoffs at McGladrey that we reported on last month are over. The problem is that if this is following standard forced ranking procedure, it could be setting up experienced professionals for competitive year ahead.

Keep us updated as you learn merit and promotion news and discuss your thoughts on this year’s prospects and the possibility of downgrades.

RSM McGladrey Can Explain the Disappointing Year

H&R Block announced its earnings for fiscal 2010 yesterday which included the details for the fka RSM McGladrey. The company’s press release basically says that times are tough but RSM had some good reasons for that.


For starters, the small tiff with M&P sort of put a damper on things and a nasty goodwill write-off:

RSM McGladrey reported fiscal 2010 pretax income of $58.7 million, down nearly 39 percent from $96.1 million in the prior year. Revenues declined 4.2 percent to $860.3 million, primarily due to the impact of the overall weak economic environment, which continues to pressure billable rates and hours within the industry. Profitability was negatively impacted by costs associated with previously resolved arbitration proceedings involving McGladrey & Pullen and other costs of litigation totaling $14.5 million in the aggregate, as well as a $15.0 million goodwill impairment charge at our capital markets business unit.

A 39% drop in profits could explain the nationwide layoffs at McGladrey that we reported on earlier this month. It’s a good thing they didn’t have the ginormous golf cake in this year’s numbers, otherwise the results would have been worse.

But if you ignore all that, things were essentially flat and everyone knows that flat is the new up!

Excluding these charges, pretax income would have been approximately $88 million and pretax margin for the segment would have been 10.3 percent, essentially flat with the prior year. The shortfall in revenues was partially mitigated by cost reduction efforts throughout the year. These efforts included headcount reductions to reflect lower client demand, as well as other non-client facing cost reduction initiatives.

OH! There’s the layoffs and they’re citing “lower client demand.” Thoughts on that, anyone?

H&R Block Reports Fiscal 2010 Financial Results [Market Wire]

Accounting News Roundup: Financial Reform Finalized; Banco Espirito v. BDO 2.0; Small Win for Skilling, Big Loss for PCAOB? | 06.25.10

U.S. Lawmakers Reach Accord on New Finance Rules [WSJ]
By the end of this one, can’t you picture an exhausted Barney Frank with his tie loosened to mid-torso, pants undone with fly wide open open and some staffer dabbing his sweaty brow?

“After more than 20 hours of continuous wrangling, Congressional Democrats and White House officials reached agreement on the final shape of legislation that would transform financial regulation, avoiding last-minute defections among New York lawmakers that had threatened to upend the bill.

After months of uncertainty about how the U.S. would craft new rules, the agreement offers thince the financial crisis of how markets and the government will interact for decades to come. The common thread: large financial companies are facing a tougher leash.”

Just in case you missed it yesterday, former SEC Chairman Arthur Levitt isn’t nearly as excited as some people about the bill. The President is expected to sign the bill before July 4.

Sidenote on this one: how the Journal managed to slip Maxine Waters through as one of a dozen “players” in this bill should cause you to question – if even for just a minute – the credibility of the paper.

Florida Appeals Court Turns Down Heat, For Now, On BDO Seidman [Re: The Auditors]
Francine’s take on the decision by the Florida 3rd District Court of Appeal to order a trial in the Banco Espirito v. BDO case. An event she isn’t thrilled about, “My doubts about the efficacy of a new trial are based on the disappointing, frustrating and completely unsatisfying way the court and the judges in this case have proceeded. Some of the additional comments raised by the Appeals Court do not bode well for this plaintiff’s chances next time around.”


Supreme Court Rolls Back a Law Born of Enron [NYT/Floyd Norris]
In more Congressional ineptitude (at least in the eyes of the SCOTUS), former Enron CEO Jeff Skilling won his case at the high court, arguing that “the concept of committing fraud through depriving an employer of ‘honest services’ was not adequately defined in the law,” Floyd Norris writes.

In other words, the “idea” of fraud being a kickback or a bribe is obvious and was defined. Manipulating mark-to-market and off-balance sheet accounting rules or “something else equally outrageous” were not and thus the law was unconstitutional. Long story/short, Norris writes, is that

Funny story on the way to this Skilling outcome – if the SCOTUS rules against the PCAOB (it is expected on Monday), “It will blame Congress for writing bad laws,” Norris writes. And who forced Congress into action on Sarbanes-Oxley?

BP: Oil-Spill Cost Hits $2.35 Billion [WSJ]
Has anyone handicapped this? Obviously the $20 billion reserve is a good ballpark figure but the overs have to be a pretty solid bet on that. Takers?

Caturano being acquired by RSM McGladrey [Boston Business Journal]
The firm fka RSM McGladrey purchased Caturano and Company, the fifth largest firm in Boston. The deal, if approved by H&R Block, would make RSM McGladrey…the fifth largest firm in Boston.