Monday, August 1st, 2022

Are Partners Earning Their Pay?

“If you are in the world of business, that means you are in the business of making money.” – Stephen A. Smith

How do you decide if Joe Partner should get a bigger salary increase (or bonus) than Jim Partner?

To me, partner compensation should be just like compensation for your staff. If they do more and learn more, they are more valuable than those who do the same thing repeatedly, year after year. You might even have some partners who have more or less retired in place.

Why do CPA firms annually give people (partners and team members) more than a cost-of-living pay increase when they do nothing new or additional from the year before?

  • Did they attend CPE sessions that result in new ideas for the firm?
  • Do they continually learn new things or methods?
  • Did they attend more networking events?
  • Did they write an article (or more articles) for the business newspaper or the firm newsletter?
  • Did they lead a special firm initiative and guide it to success?
  • Did they bring new business to the firm?
  • Did they bring top talent to the firm?
  • Did they retain top talent at the firm?

To me, it’s simple: Pay for performance.

  • "A tough lesson in life that one has to learn is that not everybody wishes you well."
  • Dan Rather

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