• Big 4 Partners With High Salaries To Experience Layoffs

    By • Apr 10th, 2008 • Category: Partner Compensation


    Picture Source
    No, that’s not happening, but it could.

    It’s happening to the lawyers and the consultants to the lawyers are helping them think about how to do it nicely.

    I was reviewing my Top 20 Pages last night and realized that if I could write the post about Big 4 partner “salaries” and the the layoff of Big 4 partners, I would probably get a million hits in one day.

    But that’s not what this is all about…

    You have no idea how many people in and out of the firms Google, “Big 4 Partner Salaries,” and “What Do Big 4 Partners Make?” Lots of interest in this subject. Any partners that want to lay it out for me will be doing the public a huge service.

    Or maybe the regulators could push for more transparency by the firms with their own financial statements? Maybe we should make them convert to IFRS?

    Report top partner and average partner compensation by tenure range.
    Report assets and liabilities, on and off balance sheet.
    Report sources of funds.
    Report reserves and contingencies for litigation.

    Come on.

    I dare you.

    Last summer, my consistent #1 post was the one about Auditing Standard 5. That’s still a popular one and people still search constantly for more information about how and when to implement it. But since last fall, and especially since January, the readers of this blog have had their minds on their job, their paycheck, their family, and their house. And they are looking for their audit firm to get better at telling them what’s going to happen next.

    Here are the Top 20 Posts:

    PwC Advisory Services Layoff

    PwC US Layoff

    Big 4 Starting Salaries – Facts

    LAUSD Still Cleaning Up Deloitte’s Mess

    PwC Layoff – Meet Me At The Reorganization

    New Century Financial – It”s KPMG Again

    PwC Layoff – Paying Pesky Employees To Go Away

    More Big 4 Layoffs

    Follow Up PwC Advisory Services Layoffs

    Bear Stearns – Sometimes Losing A Client Is A Good Thing

    Big 4 Salaries – Every Day A Surprise

    Société Générale – Risk And Control

    Follow Up on More Big 4 Layoffs

    Put A Fork In PwC – They’re Done Re: Northern Rock

    Off With Their Heads – The Fallout Of The Subprime Crisis

    Auditing Standard 5 – Repealing The AA/Enron Rule

    PwC Hit With Overtime Lawsuit Wave

    KPMG Canada Settles Overtime Suit

    Ah Youth – The Folly Of Blind Loyalty

    Layoffs – What’s Your Excuse

    And my Top 15 Keyword Search Terms from recent statistics

    Num Perc. Search Term
    1,268 3.99% re the auditors
    1,238 3.90% pwc layoffs
    713 2.24% pwc layoff
    698 2.20% kpmg new century
    397 1.25% bear stearns auditor
    329 1.04% retheauditors
    290 0.91% new century kpmg
    248 0.78% auditing standard 5
    246 0.77% pwc advisory layoffs
    241 0.76% sirva
    225 0.71% re: the auditors
    217 0.68% kpmg layoffs
    172 0.54% francine mckenna
    171 0.54% deloitte layoffs
    139 0.44% pricewaterhousecoopers layoffs

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    15 Responses »

    1. If you want to know how much partners make, just make some friends in the tax practice.

    2. I just looked at our internal financials and revenue/growth projections (all employees in client service had access to the numbers on purpose) to figure out what the average salary per partner is. It also schooled me to find out how much the average partner pays out in lawsuit and settlement fees as a percentage of salary (and we’re one of the least frequently thrown under the bus, from what I can tell.)

    3. Ah yes, the “PwC Advisory Services Layoff” post. That was a great one as your “source” said “up to 1000 professionals will be told they have no job.”

      Still waiting for the number to come close to 1k.

    4. it wasn’t 1000 all at once – that would be too hard to hide…it was 400 on that Friday, coupled with a few hundred in the Fall and a few hundred more by end of May

    5. Well, since I keep hearing that they’re cutting people 50 to 100 at a time, in all practices, in disparate locations all over the country and not issuing any press releases, blaming the individual and making them feel like losers so they don’t talk amongst themselves… I will accept the burden of keeping score.

    6. You know the more I read this “blog” the less credible it becomes. I think it is completely irrisponsible of you to use a headline like that. It reminds me of your claims of 1000 people being laid off in Advisory and Juan getting canned.

      Please stop printing headlines like this without any support. Please try and be responsible in your reporting of “facts.”

      I would love to know about Partner saleries along with everyone else. But your recent article, along with a few others, reads more like a message board topic than a blog.

      -IJustWorkHere

    7. What are you hearing about the Deloitte layoffs in California?

    8. I don’t think you are ever going to get a straight answer of what partners make. Sure, you can find a source somewhere who will tell you what the AGI is for somebody, but that is not the whole story.

      What about the magical buckets of expense that they have? The huge quarterly payouts to “help” with quarterly tax payments? Auto reimbursement/ leases? Do they take any draws? Etc., Etc., Etc.

      I would be willing to bet that most partners in the big4 probably claim around $550-750k, that from simply looking at their published financial information. If they are this stingy with reporting information about earnings TO THEIR OWN PEOPLE that tells me, at least, that they are just making sure they dot the “i” and cross the “t” because they aren’t reporting everything to the IRS.

      Or I could be seeing black helicopters.

    9. @I Just Work Here – Maybe you didn’t read the Disclaimer post yesterday…

      Just received word that email referred to below does refer to Deloitte.

      @Anonymous – A regular commenter, who asked to remain super anon in this case, sent this update to me this morning.

      …one of the Big 4 is announcing performance/utilization based professional reductions today; this will include staff and managers, and is for audit and IT auditors.

      Looks like the reductions will be in the 1% to 3% range of total headcount, depending of geography.

      The basis for the reduction is that the Firm is behind the financial plan, and with the slowdown, it looks like recovery back to plan is unlikely, and forecasts for next year need reducing.

      Criteria for impacted people included performance ratings, past ultilization, and future projected utilization. Consistent with Firm policy, they will get some sort of severance package.

      No word on partners.

    10. Deloitte’s audit practice just recently laid off a number of employees (at all levels) the last few weeks. Rumor is that more layoffs are coming.

    11. Boy, do I know about that! They targeted the blacks.

    12. In United Kingdom they make information about partner’s remuneration public, a friend of mine who works there, says that UK partners get around 1,5 mln pounds a year on average. It is believed that UK partners are paid the highest in the world. I am a former DT auditor.

    13. […] PwC reductions once the new fiscal year started, it’s now time for PwC to actualize my half tongue-in-cheek prediction of partner layoffs and salary […]

    14. I’ve long been curious about Big 4 Partner compensation, as reliable data on this is difficult to obtain. I have found at least one quality source, CA Profession Compensation Survey [conducted in Canada – “Every two years, the CICA and the provincial institutes/ordre conduct a profession-wide compensation survey”].

      According to the summary of the 2009 survey results (http://cica.ems01.com/CA_Profession_Compensation_Survey_2009-En.pdf), page 27, we find a table with “Owner’s Compensation.” For owners with partners, the survey found the following:

      Median: $246,000 (2009) – in Canadian dollars
      Mean: $306,603 (2009) – in Canadian dollars

      The data does not distinguish between Big4 firms and others, but it does give you a rough sense.

      I’ve also found another article claiming that a UK Deloitte partner (http://www.accountancyage.com/aa/news/1785156/deloitte-partner-loses-divorce-battle) made 750,000 British pounds (approx $1.2 million US).

      So I think that gives one a sense of the range: $300,000 at the low end and somewhere around $1-3 million at the high end.

      Aside from the raw numbers, I’m curious about how the mechanics of partner compensation work. Is it a base salary plus “bonus” (i.e. pay based on partnership units)? Is it a single huge lump sum payment? How does it vary? If a partner brings in a new $10 million engagement, do they get a certain % of that as personal compensation?

    15. @Tom

      For additional information on this subject including the performance review process, read this post, http://retheauditors.com/2009/11/05/live-our-values-demonstrate-our-behaviors-support-our-strategy/

      Although it is based on information from PwC, and all firms are slightly different, it is pretty representative.

      fm

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