From a voracious reader of Stephen Chipman’s blog:
GT just announced the admission of 22 new partners/principles notably 5 from NY, 5 from Alexandria and 3 from NC – 9 from audit 3 from tax and 3 from advisory
Yes, we realize the numbers don’t work but we’ve confirmed the details we’ve got. We hear there’s an email floating around out there so if you’ve got it handy, fire it our way.
UPDATE – July 14, 2010: We received a copy of Stephen Chipman’s email which we’ve presented here for your reading pleasure.
Internal distribution only
One of the highest and most visible forms of demonstrations of stewardship within a partnership come thorough admitting new partners and principals. This represents a critical underpinning for our continued vitality and success. It is within this context that we are pleased to announce the following individuals will be admitted to the Firm as partners or principals, effective August 1, 2010.
Having outstanding partners and principals is an important differentiator for our Firm in our ability to serve our clients with distinction. Each of these professionals has demonstrated their dedication to making a difference – to our clients, to our profession, to our communities in which we live and work, and to our Firm. Their commitment is reflective of personal responsibility, sacrifice, and accountability which we now pause to recognize.
Please join us in congratulating them on this significant recognition of their contribution and in wishing them continued success as partners and principals of Grant Thornton.
And here’s a further breakdown of the promotions by service line:
Global Public Sector – 5
Transaction Advisory Services – 2
Corporate Tax – 2
Audit – 9
Corporate Advisory and Restructuring – 2
Corp. Strategic Federal Tax Services
(can some demystify this acronym?) – 1
State and Local Tax – 1
And by city:
Alexandria – 5
NYC – 4
McLean – 1
Kansas City – 1
Cleveland – 1
NY – Melville – 1
Charlotte – 2
L.A. – 1
Raleigh – 1
San Diego – 1
Denver – 1
Atlanta – 1
Wisconsin (Milwaukee?) – 1
Chicago – 1
Congrats to all the new partners and principals at Grant Thornton!
Straight out of the Bubba Gump Shrimp location up the street from 5 Times Square:
Ernst & Young, Financial Services Office, NY
Received communication that our annual ratings were finalized and discussions between counselors and counselees to occur by July 30. Promotions are still not final, but promotions and compensation will start to be communicated in August (to be effective October).
So t-minus three weeks (give or take a day here or there) until “you’re not going to be disappointed with raises” which apparently could mean that they will make PwC’s raises look like chump change (for auditors anyway).
BUT! In case you need a refresher on the numbers so far: 3-5% is what we last heard for those in the meaty part of the curve. No word on what top performers are getting but speculation is welcome. Keep us updated.
Here’s one thing you don’t have to worry about: whether your employees care a great deal about getting a raise. Looks like they’re not all that focused on their pay, as long as they can keep their job.
A recent study asking employees to rate contributors to job satisfaction conducted by the Society for Human Resource Management found that compensation dropped to number five for the first time since the organization started doing the survey eight years ago. It was number three on the list last year.
But top on the list of contributors was “job security”. That outranked such choices as “benefits,” “the work itself,” “opportunity to use skills,” and “feeling safe in the work environment.”
What’s more, a new contributor to job satisfaction, “organization’s financial security”, also outranked compensation, placing fourth on the list.
It wasn’t always thus. In 2006 and 2007, compensation was the winner. In fact, in 2006, 67 percent of respondents picked that as the most important factor in job satisfaction. In the most recent survey, just 53 percent chose pay.
Apparently, that attitude is not shared equally among all levels of the organization, however. Job security ranked at the top for non-management and middle management employees. But it didn’t make the top five for executives, who chose “the work itself” as the number one contributor.
Other data indicates that it’s probably a good thing employees are less focused on pay than they were in better times. According to a survey of small businesses by SurePayroll, a Chicago-based payroll processing company, the average paycheck dropped .4 percent year-to-date. June marked the first month this year with negative year-to-date paychecks. In fact, pay hasn’t been this low since October 2005.
The bottom line: Quite simply, for most employees, it’s the job, stupid. And that means wage pressure is unlikely to require employers to raise prices to maintain margins anytime soon.
Because “early July” becomes “mid-July” in about two days and some people would like to get this over with:
“Just as an update to GT’s “early july” announcement about raises. It hasn’t come yet, but some have been told that they’ll be getting promoted (I’m guessing seniors and managers) and were told that National is still trying to figure out what they’ll be.”
So you can take that as “Chipman and Co. are stuck in an epic game of Risk and can’t be bothered at the moment” or something else entirely if you like. If your anxiety level is at double-Lexapro levels or if you’ve heard something other than the earlier rumors, discuss below.
The PricewaterhouseCoopers compensation post is still a hot thread, as the majority of news was about double-digit raises and bonuses have been reported from many although at least one commenter was skeptical that all the news was good in the PwC world:
“[P]robably the people most willing to share are the ones who got the most $.”
That comment was in response to someone who assumed PwC was throwing around “1” ratings (the firm’s highest) like boomies at a Phish show. Of course, not everyone can be so lucky and apparently there are a couple of terms being thrown around by the less fortunate.
Late last week a source close to PwC dropped us the following:
“Fonus”– noun; the much-diminished bonus Big 4 firms give to borderline staff they can’t afford to pay properly, but don’t want to quit.
Not to be confused with the ‘nonus,’ which is no bonus at all.
Apparently these terms have emerged this week as fonuses started appearing in people’s paychecks.
So not to worry “as expected” staff that can’t afford to quit your jobs! If you ended up with the 6%/0% instead of the 14%/10% or whatever, whathaveyou, you’re not alone! Plus, there are some fun terms you can throw around to help you bitch about it. Continue to discuss and keep us updated with any other fallout from the discussions – verbal creativeness or otherwise.
Lots of news this week on the compensation and promotion fronts with Grant Thornton, KPMG and PwC all making announcements or soon-to-be making announcements (that we’ve heard; are you holding out on us, E&Y?).
The latest out of Deloitte is that the discussions are starting (although maybe not today since it sounds like most are off) but the news on yay or nay on promotions is starting and now the anxiety around comp will increase over the next two month:
The year-end ratings and promotion decisions have been approved by National; so the process of communicating both to Deloittians is starting…At a high-level, I heard that promotions this year were tough – that being said, plenty of people made it through. For the most part, people are now waiting to hear about comp – scheduled for communication the last two weeks of August.
We did hear one rumor about the number of new partners expected, “at a recent partner meeting, it was announced that there will be more than 60 new PDPs nationally, with more than 10 being in the Northeast,” so you can toss that around your meat-ingestion fest this weekend if you so choose.
Discuss your epic/tragic news re: your new promotion if you’ve received word and keep us updated on the comp rumors.
From the depths of 666 Third Ave:
In New York:
Associates look to come in at almost $10k less than they did in 2007
Senior 3’s are looking to make almost $10k less than Senior 3’s in 2007
New Managers are looking to make almost $15k less than New Managers in 2007
Senior Managers are looking to make almost $15-20k less than Senior Managers in 2007
Raises (without promotion) are looking to be:
3% for employees rated under a 4
6% for employees rated a 4 or 5
Our source indicates that these are all rumors at this point but based on the last Communique de Chipman, the official numbers should be known soon (“early July”).
In the previous thread lots of numbers were getting thrown so who knows; maybe GT is pulling a PwC and promising low, delivering high? Discuss.
It’s raining bonuses and raises over at PricewaterhouseCoopers these days. Unfortunately, all I’m seeing are news tips (monetary tips or buybacks at the bar are always appreciated). All of my sources are from the NYC office, so if you’re elsewhere in the country, please share your numbers in the comments below. Here’s what we know so far:
• Advisory/Consulting senior associate received a raise north of 18.5%. No, that is not a typo. So in the advisory practice it’s safe to assume the spread is 0% to 19% for raises this year, with the average being about 6% as reported by Caleb earlier.
• A recently promoted associate to senior associate in advisory received a 10.5% raise and a $3,000 bonus.
• Tax bonuses are being handed out now as well. Size matters in this instance, people. Cough up the details below.
This indicates that resources are being spent on what is being determined to be the right people in the right practices. Average performers should expect to receive 4-6% and take it to the bank.
Audit people, what are your numbers looking like? Email us or post your comments below. Practice/office/level are always appreciated
Thanks to everyone that is sharing information. Enjoy the weekend.
I’ve always been a nerd.
Not a dork, a nerd. The financial services industry and its incredible economic influence (from tax structuring to secondary industries like cab drivers and event planners) has always interested me. So it should come as no surprise that I am an avid reader of the Wall Street Journal (I have the dual paper/online subscription…obviously).
There was an article in today’s edition that has to do with getting “the salary you want.” If only it was as easy as these five points. For what it’s worth, here’s my summary of, and input on, how these
rules suggested guidelines if you are looking to transition out of public accounting:
• Do your research – The article makes a point to research what current salary ranges at the potential place of employment could be. Salary.com, Payscale.com, and Glassdoor.com are all mentioned. My advice – remember to do your research with grains of salt in easy reach. The greater number of employees that contribute their statistics will lead to a more accurate number. (Glassdoor.com lists PwC’s “audit associate” salary average salary as $53,358. Is that accurate? You tell me.)
• Don’t give out the first number – When you get beyond the confusion of that statement, you realize the article is referring to the pay day you would love to receive if given the job. My advice – Don’t give a number. Here’s exactly what you need to say if asked “what is your ideal salary:” “For me the role and opportunity is what is most important.”
Yes, that is a vague statement. But it is your recruiter’s job to fight for your salary; remember their pay day is dependent on yours.
• Don’t lie – Listen to your mother. My advice – this is self-explanatory. Your current salary will be verified. Lying to your recruiter about anything – most notably salary and background check details – is a way to sever ties indefinitely.
• Don’t take the first offer – The article goes back and forth about negotiating salaries, something that you won’t do if you use a recruiter. However, if you are not using a recruiter, I recommend reading this bit. My advice – People typically have two magic numbers in their head: 1) the salary they’ve dreamt of and 2) the number they really need to receive in order to commit to leaving. Be honest with your recruiter. They will fight for you, or they will talk you off the ledge of asinine expectations.
• Once that’s locked in, go for other benefits – The article pretty much shoots itself in the kidney on this one. Read it. It’s 17 seconds you’ll never have back. My advice – consider the benefits part of your total compensation. More or less vacation days? Summer flex programs? Cheaper health benefits? Better 401k? List everything out and compare with your current situation. Due to fair employment practices, companies are usually hand-tied to offering equal employees different (or “better”) benefits.
That’s all I have. Oh and for the record, the difference between dorks and nerds is simple. Dorks read the Journal with coffee. Nerds read the Journal with scotch.
Grant Thornton has been on strict radio silence lately which makes us wonder if Stephen Chipman had given up on blogging or if they had simply given everyone the summer off.
The blog remains a mystery but we do have some news on GT bonuses (the jury was out for awhile) and merit increases and it seems to be good news but extremely short on details and extremely long on Chipman prose:
Additional guidance on bonuses and compensation
On our last all-employee call, I told you that I was optimistic that the firm would award bonuses this year. I am pleased to share with you that we are now in a position to say with certainty that we will be paying bonuses for 2010.
As you know, the overall level of bonuses is dependent on our financial results at year end. We are currently working on this modeling based on our economic forecasts and will have the final numbers next month. However, I can let you know that we plan to pay the bonuses in the mid-September timeframe.
Similar to our merit increases, our bonus payments are based on our pay-for-performance philosophy, where we strive to recognize and reward individuals commensurate with performance. We’ve held this philosophy for a number of years, but could have done better executing on it. You reminded us of this in our Voice Your Experience pulse survey, and we are striving to do better. This year — and even more so going forward — we will be giving larger merit increases and bonuses to our top-rated performers to ensure greater differentiation.
Merit increases should be finalized in the next couple of weeks and your local office will begin communicating with you in early July. New compensation is effective on August 1. The increases are based on extensive market information for each of our practices and your individual contributions.
As we work to differentiate our firm through providing consistently distinctive client service, we will continue to move towards a model that rewards each of our people relative to their contributions to the success of the firm.
I’m excited about our direction as a world-class firm that truly makes a difference, and hope you are too. Thank you for all that you have done, and continue to do, for Grant Thornton.
So whether or not this puts your anxiety to rest is another matter. Discuss and keep us updated in the coming weeks.
Need help deciding what you want to be when you grow up? Check out the rest of our posts on credentials for accountants.
If you’re really into internal audits and information systems, want to make decent money and never want to worry about having to find a job, you may want to look into the CISA.
None that we know of, beyond what you’d need to secure a job in the field to gain required professional experience.
CISA candidates must have 5 years of relevant experience in IS auditing, control or security work and adhere to the IASCA Code of Professional Ethics. Experience must be obtained in the 10 years before taking the exam.
The exam is administered twice a year (June and December) and candidates must register no less than two months before the exam date. The exam is made up of 200 multiple choice questions that must be answered within 4 hours. The score is graded from 200 – 800 points and a CISA candidate must score at least 450 points to pass. It covers the following areas:
IS Audit Process (10%)
IT Governance (15%)
Systems and Infrastructure Lifecycle Management (16% of Exam)
IT Service Delivery and Support (14%)
Business Continuity and Disaster Recovery (14%)
The Information Systems Audit and Control Association (ISACA) sets the standards of and administers the CISA examination.
PayScale has some interesting figures on compensation for those with the CISA and we have to say, it’s one of the more lucrative credentials we’ve covered thus far. Interestingly, GT pays its CISAs far better than P-Dubs.
|Deloitte||$59,942 – $86,500|
|Ernst & Young||$60,737 – $90,757|
|KPMG||$70,736 – $111,331|
|PricewaterhouseCoopers||$58,448 – $97,657|
|Grant Thornton||$56,500 – $143,400|
IS Auditors make between $60,047 – $82,842 while IS Audit Managers can make up to $108,226. The money is good if you’re willing to put in the hours and pass a little more than half of the exam.
Last we checked on Deloitte’s compensation news, it was news of the wealth being spread around more than last year, although no one was really impressed based on the discussion that followed.
But now out of Ronaldo Fan Club HQ we’ve got an opening bid:
“It was announced at a Tax meeting last Monday that the average raise for NE Tax would be 5% this year.”
Since Dr. Phil recently said that raises weren’t going to return to “pre-recession levels” an average raise of 5% may be in the ballpark. Then again, this is only the tax practice…
Anyhoo, our source told us that reactions boiled down to:
1. After axing or transferring everybody from the Stamford, Wilton and Hartford offices, they better pay the remaining people more!
2. At least it’s more than the average of 0% last year…
If you don’t fall into either camp 1 or 2, make your opinion known. Otherwise, get back to watching your fantasy team suck.
It’s been awhile since we’ve heard any news on the E&Y comp front but we finally received a preliminary report from one source late last week:
[Roundtables] went the same way they always go. Surprisingly, less pushback on proposed ratings for the portion I was involved in. I really think they may be scared to lose more people. Indications are raises will be low (3-5% range for most, more for 4/5 rated people) Bonuses are probably non-existent for the masses. Annoucements of promotions for other levels will be made in August (staff to senior, senior to manager, manager to senior manager) they will also do comp increase discussions then. Effective 10/1…
So despite Ernst & Young re-reassuring merit increases the 3-5% for the meaty part of the curve and no bonuses isn’t exactly what “the masses” were expecting.
That being said, this office may be catching some bad luck since we that at least one E&Y partner was confident that the raises would beat PwC’s.
Although, some lucky E&Y soldiers have seen some “spot bonuses” for their hard work but it’s not clear how widespread that generosity is.
On a marginally-related note, we’ve received word that the partner promotions were announced but we’re still trying to run down some details. Get in touch with us if you’ve got the scoop on the new partners, what you’re hearing about comp in your office and discuss below.
UPDATE, Wednesday June 16th: A couple more accountants familiar with E&Y have their own take on the comp situation:
I heard that we “we’re not going to be disappointed with raises” here at EY. I don’t know what that means. And I tend to believe, that as you posted today, 3-5%, is a more realistic view of what’s going to happen (though that’s just my own pessimism).
and that is coupled with another source, “Haven’t heard anything further on comp other than ‘moderate.’
Continue attempting to decipher the latest. As you were.
From a Klynveld Quaker:
In recent meetings with PA Business Unit leadership with all audit staff (i.e. A and SA’s), we were told that of the 32 inidivudals up for promotion to Manager in the combined three offices (Philly, Harrisburg, Pittsburgh), that 22 were officially promoted. Of the 10 that weren’t, at least 1 just came back from international rotation, and either 2 or 3 (can’t remember which) hadn’t passed the CPA exam and therefore couldn’t be considered for promotions. All raise and bonus theories were squashed (as to hard percentages), though we were told to expect some form of raise as well as variable comp at FYE.
So just a shade better than two-thirds of the Keystone KPMGers eligible for manager will be in the new manager class. As you may remember, this is pretty close to the breakdown for one office in the Rockies but a little less than an office in the northwest.
Since the firm has four months to go in its fiscal year, the fact that the local leadership wouldn’t even give a hint comes as no surprise. That said, it hasn’t stopped people from speculating about what they think the increases will be. We encourage you to share what you know, what you’ve heard, or your own wild-ass guess. And keep us updated with the latest in your office.
Last Friday’s post by Caleb surrounding the Bonus Watch at Deloitte sparked a handful of intuitive comments from GC readers.
In case you didn’t read the post and subsequent commentary, Commenter Anon51 responded to the question “what do readers suggest firms do to retain practitioners” with the following:
1. treat every team member with respect
2. you can’t just force your team to work harder year after year with fewer people and a smaller budget
3. pay 4-7 year people more, pay new hires less, so it seems there is an incentive to working harder
4. reward your people with an extra day off without having to utilize vacation time, especially after a really busy month/audit
Point 3 is bolded because it resulted in the following comment from Guest:
“That’s a really good idea, and I’m not being sarcastic. There is no reason why new hires fresh out of college need to make $59k ($55k + $4k sign-on bonus), when they would happily work for $50k. Then, a $5k bump every year would be a reward, with maybe a higher bump during promotion years…Pay disparity is a bigger issue than actual pay.”
Well said, Guest and Anon51.
I’ve said it before and I’ll say it again – the Big 4 are constantly in cahoots with one another with regards to hiring benchmarks. So I propose that TBig4PTB get together and reassess their starting salaries. Behold, a template for all Big Wigs to follow:
1. Decrease starting total packages (salary + sign on) by seven percent. Lower the bar from the get-go.
2. Now is the time – blame the decrease on “a firm wide strategic response to the economic risks of being a major player in the professional services industry. Unofficial response – did you see the DOW sink like the Titanic the other day?!”
3. Spread gap created by initial decrease in salary over the next two years. This will create an artificial sense of accomplishment and praise.
4. Send internal emails stressing the “increase in raises for well deserving employees.” Everyone cheers.
5. In three years college graduates will not know the difference; this “decrease” becomes a non-issue.
Guest’s comment that “pay disparity is a bigger issue than actual pay” can become a non-issue with very little effort. Is this fair or ethical? Mehhhhh. I personally think it would be a slap in the face to those of you who have busted your humps and sacrificed career and personal opportunities all in the name of KPDeloitterhouseErnstMG. But it certainly wouldn’t be the most desperate attempt made by one of the firms in recent memory.
Raising morale – hardly. What are your thoughts?
Can we have a show of hands who takes a list of employers published by Time Warner seriously? Fine. To hell with you; for this particular exercise we’ll assume that the list is 100% accurate.
Here’s the breakdown for the Big 4 on the CNNMoney’s 100 Top MBA Employers, Where MBA students say they’d most like to work:
#12 – Deloitte
#44 – PricewaterhouseCoopers
#45 – Ernst & Young
#75 – KPMG
So Deloitte dominates when you look at the Big 4’s performance. To put it in a little bit of perspective, Deloitte ranks ahead of The Blackstone Group and Morgan Stanley while the rest of the Big 4 rank behind the State Department.
Is this possibly due to the fact that they are the only firm to keep their consulting (not Advisory) practice in-house? Do they simply do a better job of selling their firm? Or is it possibly because male-patterned baldness is not discriminated against in leadership positions?
Or maybe we’re making too much of this. All the firms have a spot on the list and Google beats everybody’s ass with extreme prejudice, so is this one of those “it’s just a thrill to be on the list” moments, which results in the fliers all over your office and in the halls of Career Services at B-schools?
But forget all that for a minute. What’s really surprising (or perhaps not) is that the expectation of MBA graduates whose preferred field is public accounting are expecting an average salary of $59,176 for their first job after graduation. That amount is less than those for academic research ($79,590), education/teaching ($76,138), government/public service ($77,943) and “Other” ($92,110). Oh, and it’s behind “Auditing/accounting/taxation (corporate)” at $64,841. The average salary for preferred fields is $90,990.
Five years after graduation, those same graduates expect to make $92,075. Again, dead last. The average salary being $157,324.
Whether this says more about the state of the accounting profession or the firms that court those seeking accounting focused MBAs, we’re not really sure.
But in the grand scheme of things, it might just say that Deloitte’s position on the list may be – gasp – meaningless.
100 Top MBA Employers [CNNMoney]
Last month we told you about some Deloitte partners in the Northeast that were dropping some “Applause Awards” on “strong performers,” possibly to help calm some nerves.
At that time, our sources indicated that “partners have also hinted at more money coming their way.” It now sounds like those hints are resulting in some greased palms:
[S]ome $1,000 [Outstanding Performance Awards] have been circulating in NE AERS for “performers”. Similar to the $100 applause awards for the larger segment of consultants, I think partners are trying to head off a mass exodus; not sure if the 1k will make a difference; but it does seem to be keeping people from quitting prior to hearing about their year-end comp adjustments
So regardless of what some Deloitte HR types might think, there are partners out there that are worried about people leaving and they seem to understand that throwing a little cash around does wonders for cooling some anxious heads.
It’s been, in the words of one source, “a hell of a week” at KPMG. John Veihmeyer & Co. have been on a whirlwind communications tour, people up for promotion are getting the good/bad news and the whole summer blast thing has people soiling themselves with excitement.
Since they’ve been on such a tear, we’ll update you with a little more news out of the House of Klynveld, returning to promotion and compensation news.
First the bad news – we’ve learned from multiple sources that newly promoted SAs in the audit practice won’t be getting much of a merit increase for their new positions. The news is that the new promotees will receive an early 1.25% increase later this summer that will be followed up by another increase, although those raises will be subject to the firm’s performance in the last part of the fiscal year.
Now the good news – After hearing from a couple offices in the west, most of the SA3s that are up for the promotion to manager seem to be getting the bump. From one office in the northwest:
Despite rampant speculation about widespread non-promotion of seniors to manager, only 3 (of around 15) 3rd year seniors didn’t get the bump. One CPA licence issue, and two performance issues. Nothing out of the ordinary even in a regular year, let alone in one where the holdbacks are supposed to be so numerous that they are creating a new 4th year senior training.
The percentage of SA3s in a Rocky Mountain office that are getting promoted is a little lower with approximately two-thirds of the class getting the bump. So far, only the (un)lucky (i.e. non-promotees) ones have received the news while the new managers continue to sweat it out. For this particular office, the decision to promote/not promote was a little more confusing that its counterpart in the northwest.
Based on the information we’ve gathered, each office is essentially given a number of promotees by the boys at 345 Park and the local office leadership is tasked with figuring it out from there. Criteria for promotion to manager (as we understand it) is that 1) the eligible SA needs to be “ready to be a manager” and 2) they need a business case (i.e. have clients to serve).
In the case of this office, it sounds like this was scrapped. Rather, it was decided that historical rating was the determining factor and not the criteria we outlined above. In other words, if you received high ratings (“EP” at KPMG) as an SA1 and SA2, that was more important than whether you actually have clients to work on as a manager. If you were in the meaty part of the curve (“SP” at KPMG), despite your strong “business case” you are SOL. Our source told us that, in the past, they were always told that “my historical rating would not be a determining factor when it came to promotions.”
So basically it boils down to how your particular office is doing. If you’ve got a strong market with plenty of clients, things should go fairly smooth (with a few exceptions). If you’ve got a competitive or shrinking market, your odds of getting the bump go down, in some cases, way down.
As always, keep us updated with your office’s developments, and congratulations and good luck to the new SAs and Managers!
While some people are still sweating out to hear if they’re part of the new manager class, John Veihmeyer and Henry Keizer did more casual chatting with the troops and this time it was about everyone’s favorite topic to bitch about – compensation.
Specifically, some e asking about raises for FY ’10 and 401k match. Strange thing is, JV has already addressed the issue of KPMG raises in a previous communiqué by saying:
“[B]y year-end, we fully expect that the pickup in market and business conditions will drive compensation increases for the vast majority of our people. Also, assuming we meet our plan, as we are on track to do, our goal is to enhance our variable compensation pool from last year—meaning higher bonuses than last year for EP performers as well as bonuses for deserving SP performers.”
Good thing he doesn’t mind repeating himself:
Inquisitor #1: I was just wondering, if it’s likely that employees will get raises this year?
Veihmeyer: We are very optimistic at this point that that is exactly what’s going to happen. We all need to stay really engaged in what’s going on in the marketplace at this point to make sure that the second six months of our fiscal year also tracks the plan that we put in place. If we do that, we are very committed to sharing the rewards appropriately across KPMG.
As we assess the market right now – means that the vast majority of our people will be getting compensation increases this year. We are just as committed to increasing that variable compensation pool to the maximum extent we can reflective of how our results play out over the next six months.
Keizer: And in terms of variable compensation at the EP level that will translate into larger rewards and our deserving SP performers will also receive compensation rewards.
I am confident – based on what we see out in the marketplace, the foundation we have within the firm, the indicators of economic vibrance that are coming back – that we will be able to reward our people better and to be able to restore some of the things that we had to eliminate in a very measured and prudent way.
And John Veihmeyer was just wondering why you didn’t read his previous statement (or websites where it might appear) on the matter. Since V seems like a nice guy he managed to say what he said before only this time without saying “Yes” outright. Whether the absence of this explicit confirmation is a cause for concern can only be determined by you. Hank chimes in about the bonuses, presumably so he doesn’t feel awkward (at least that’s how we picture it).
So what about the 401k match? Is that returning to pre-financial apocalyptic levels?
Inquisitor #2: You mentioned earlier that we recently brought back the Standing Ovation award into the Encore program. Can we expect to see a change in our 401K match?
Veihmeyer: With an eye toward maximizing the immediate financial rewards to our people – to a level that we all can feel good about – we have some goals and objectives around base and variable compensation that in our view will take precedence over 401K as we reinstate and are able to shift those rewards. But it’s something that if the circumstances change and our ability to reinstate some of those things evolve, we will continue to look at it.
In a word – No. First things first you rubes – We’ve going to get every single Klynveldian feeling great about their immediate financial rewards. Until that is accomplished, your retirement will have to wait. The time frame of “we all feel good” was not given.
Some straight talk from Barry Salzberg:
Barry had a [recent] session in LA at which time he said essentially the following about comp:
1. Raises and bonuses will be distributed this year
2. Raises and bonuses will be larger than last year, but are unlikely to return to “pre-recession” levels any time soon
3. More people will be receiving raises and bonuses this year
Unfortch, Deloitte doesn’t seem to be getting involved in the pissing match with E&Y and PwC by putting a number out there but “more people” and “larger” are both somewhat encouraging, no? Well, not really, according to our source:
To my knowledge, we’re not getting any more info. On the people side; the video didn’t say anything new and everybody knows that the economy’s getting better and that Deloitte’s doing better; so we all assumed it was going to be like he said. Without a number benchmark, words are pretty much useless.
From an accountant familiar with E&Y:
We got two voicemails today, one from head of Banking and one from the Vice-Chair of people, both talking about compensation. I think the underlying fear is that we don’t have enough people anymore in our practice because they keep stressing all the things that the partners are going to do besides compensation to boost morale (like have a lunch with staff sometime around cinco de Mayo).
The last month and a half has been a bit, shall we say, tough on the E&Y and the troops. That being said, the news that Ernie would beat P. Dubs raises may or may not have got some people to relax but it appears that the firm’s leadership is still on the offensive to keep spirits high.
After discussing it with our resident HR expert, the problem with these little wine & dine events is that at this point they are too little, too late. People don’t want they faces fed. They want answers. They are crawling the walls with anxiety about three things:
1. What raises will be.
2. If there will be a bonus pool.
3. Who is getting promoted.
And they want to know the answers ASAP. Raises have been triple-reassured at all the firms and people want to know that number; they want to know if there’s a bonus pool.
Everyone at the point of promotion has made up their minds about what they will do if they get promoted or not. Plus everyone who is not up for promotion is talking about who will get promoted, who won’t and the reactions that will result (e.g. storming out of the office or a nervous breakdown).
The reality is that these things take time. The fact that PwC put a number out there was impressive (and some have said, desperate) shows that partners are aware of the anxiety and they’re trying to get people to relax.
Deloitte is up first, as their fiscal ends 5/31 and we’ve heard that there has been generosity passed around there but it will ultimately depend on the the merit increases. We hear their all hands webcast is coming up soon and that discussions are occurring this month so it won’t be long.
No amount of margaritas, $100 bonuses or NHL playoff hockey tickets will change the fact that people have worked it out in their heads about what they will do when they get the news. And once that news is known, people will act fast. We would encourage everyone to be patient, try and be rational etc. etc. but we also know that’s an futile request.
On Friday, Grant Thornton had a firm wide call to discuss several things including layoffs, compensation, and grab-bag questions.
Headcount Reductions – Steve-o believes that the worst is over and that “restructuring efforts are substantially behind us.” If there happens to be additional “headcount transitions” it will be to refine operations or part of the no He went on to say that the people that are GTers now will, “in very large part,” remain GTers. So can we assume the action in Cleveland and Chicago was the last of it?
Compensation: GT seems is making big push towards a “pay for performance” model for its employees which means compensation adjustments will focus on top performers (“5s” in GT world) and market based adjustments (i.e. keeping up the Joneses) won’t be happening. SC cited a downward trend of salaries in the accounting profession based on a survey that GT does with Mercer (sounds convenient) for the phasing out of market adjustments. He said there might be some exceptions to this.
The size of the merit adjustments have not yet been determined because it all depends on how well 1) GT performs through the end of the year and 2) individual performance. Chip said that enough people were belly aching about the old adjustment system that a change was warranted. This will be implemented slightly for this fiscal year (can’t get all Darwin about it 3/4 of the way through the fiscal year) and will be the main methods for next year and going forward.
Bonuses: SC cleared this whole issue up saying that it has not been determined if bonuses will be paid this year. It all depends no the firm’s performance in the final quarter of the fiscal year. He did say that he’s pre-tay, pre-tay, pre-tay optimistic about the firm “being in a position to pay bonuses” but they’re still crunching the numbers so there’s no telling if it will be a mini-windfall, pocket change, or a set of steak knives.
Not to worry though, as the top performers will certainly get something if everything goes well at the firm overall.
This “new” focus on pay for performance seems kind of familiar since all the firms assign rankings to employees (with their own bizarro methodologies) and are paid accordingly. It makes you wonder if those that fall in the meaty part of the GT curve will get such a small adjustment that it will be another twist on the forced ranking trend amongst accounting firms.
Steve-o then shared his general optimism about the direction of the economy and what it means for the firm, a few recent client wins, yada yada yada. He also updated everyone with some very vague details on the firm’s new strategy “Unleashing Our Potential” that will be rolling out in the next fiscal year. Basically all non-partners will have the chance to drop their $0.02 on this strategeroy very soon but other than that we couldn’t tell if the new strategy involved a lunar landing or full-scale assault on financial reporting fraud.
Last but perhaps most importantly, Steve-o admitted to enjoying the Masters very much, however he was quite clear that he was less than thrilled to see KPMG on Phil’s lid. We’re sure it’s nothing personal against Phil but those may be fightin’ words directed straight at Johnny V.
I said it on Tuesday and I’ll say it again. HERE. WE. GO.
Caleb ran a post yesterday about Ernst & Young raises that as of deadline time had no comments. Zilch. Nadda. I was surprised by this because if anything guarantees comments on GC posts it’s talk about layoffs, Overstock.com shenanigans, and money (not in that order). Needless to say, I think this update will change things.
GC received a tidbit from an EY reader about the recent phone call:
“I did receive a voicemail from Steve reassuring compensations but, it appears that the firm will concentrate giving raises to its “high performers”. So, this potentially could mean that only EYers rated a 5 (need to catch a fraud to get this or have really sore knees) or 4s (need to be well liked all the way up the pipeline on an audit) will have a respectable raise.”
So – if you burned through busy season working yourself to the bone for Uncle Steve but stopped short of needing knee pads (it should also be noted that the parts in parentheses above are part of the original email…) you might be shit out of luck for a respectable raise.
“In addition, I checked with a partner and the August 1st early pay increase is a rumor. The rumor appeared believable since EY is a monkey see monkey do type of firm but, our partner said that EY’s raises although be start on October 1st, will be higher than what PwC will offer to its auditors.”
Boom. To quote my man and crime fighting detective Marcus Burnett, “Shit just got real.”
Shit. Just. Got. Real.
Is there any credibility to this? Sure there is. To think that the upper leadership from every firm does not talk to one another about compensation targets is ridiculous. Merely for the sake of the partners’ bottom line, it’s necessary to know what ones
competitors peers are paying in compensation. Why some loose-lipped partner is sharing this information is beyond me, but hey, it’s dedicated readers fed up with their own compensation that forward these tips on. Now, let’s talk it out.
Which would you prefer – every 10 key cruncher receiving a mediocre payout or just the stars receiving something slightly-better-than-insulting? Comment below, regardless of which firm you work for. Be sure to shed some light on the timing of EY’s payouts if you know any details.
Last week we kicked off our certification series by looking at the CFE for those of you interested in becoming numbers sleuths that also have the figurative iron-clad stones that Sam Antar insists are imperative for any CFE.
This week we look at the Certified Management Accountant (“CMA”) credential and while it’s probably not as sexy as the CFE, a lot of you may want to consider the CMA if you see yourself spending a good portion of your career working as an in-house accountant or finance pro.
The credential is administered by the Institute of Management Accountants whose website states that “85% owork inside organizations, where expertise in decision support, planning, and control over value-adding operations are crucial elements of operational success,” and boasts 60,000 members worldwide.
Here’s the rundown on the CMA:
You can meet the education requirement by verifying that you have a bachelor’s degree from an accredited college or university or that you have a professional qualification, such as a CPA (here’s a partial list of global certifications that qualify).
The professional requirement for the CMA is two continuous years of experience in management accounting or financial management. This can be completed prior to the application or within two years of passing the CMA exam. The website states that, “Qualifying experience consists of positions requiring judgments regularly made employing the principles of management accounting and financial management.”
There is a long list of experience that will satisfy this requirement including financial analysis, budget preparation, management information system analysis, financial management, management accounting, auditing in government, finance or industry, management consulting, auditing in public accounting, research, teaching or consulting related to management accounting or financial management.
The CMA Exam is currently transitioning from a four-part format to a two-part format. The two-part format rolls out on May 1st but testing of the four-part format will be available through December 31, 2010. The new format will focus on financial planning, analysis, control, and decision support. The two four hour exams consist of 100 multiple choice questions and two 30 minute essay questions.
Part 1 breaks down like this:
Planning, Budgeting and Forecasting (30%)
Performance Management (25%)
Cost Management (25%)
Internal Controls (15%)
Professional Ethics (5%)
And Part 2:
Financial Statement Analysis (25%)
Corporate Finance (25%)
Decision Analysis and Risk Management (25%)
Investment Decisions (20%)
Professional Ethics (5%)
There’s a lot of information on the new exam format including fees, testing windows, and more that can be seen here.
After certification, you are required to complete 30 hours of CPE annually, of which, 2 hours are required to be in ethics.
Many CMAs work in budgeting, financial planning, cost accounting, performance evaluation, asset management and other various capacities. The work often times result in internal reports that will help management make prudent decisions rather than just taking wild stabs at running their respective companies. So it goes without saying that this is important stuff.
For those of you still working in the public realm, you can get benefits out of a CMA too. Our favorite Exuberant Accountant, Scott Heintzelman, has a CMA and he told us that it helps him better understand the needs of his manufacturing clients, “I had a bunch of clients in the manufacturing space and many of the controllers were CMA’s. I thought taking the time to get this certification would give me more creditability with this group…it helped me gain more manufacturing clients as they saw me as one of them, not just a CPA.”
Compensation and Other Benefits
According to the IMA’s most recent survey, CMAs earn 24-31% more than their non-certified colleagues. Those surveyed that have both a CMA and a CPA have even higher salaries. Now, we know what that you’re hung up on money but there are some other advantages too.
According to Scott, “Partners then had this belief [then] that the CMA was a brutal test (and it was). So a year later I started the process and actually was fortunate to pass the entire test on the first attempt. I had also passed the CPA exam on the first attempt a year earlier and so my partners suddenly thought I was some super smart young accountant and many believed I was ‘fast tracked’ to partner. I believe I just worked my butt off to learn that stuff, but none the less several of my partners looked at me differently. A very key moment in my young career.”
Multiple sources have told us that Bob Moritz has put a number out there for comp adjustments during the firm’s webcast today :
Sitting in the Bobby Mo Firmwide Townhall Webcast. Raises: 5% to 8%.
But don’t start high-fiving just yet:
PwC expected to be 5% to 8% raises this year, but still a “quarter to go” per Moritz on today’s townhall webcast.
Early reports also are that internal firm services (IFS) will be getting 3-5%.
Thoughts? Your move, KPErnstDeloitteMG.
Here we are, it’s April, and most of you are happy to be bored (relatively) at work for the first time in months. Now that your brain isn’t saturated with numbers and/or what you’ll eating at your desk, you may be weighing your options. As we’ve mentioned, Big 4 partners are expecting this and naturally they want to keep their top performers. How best can they do this? Bribery of course!
And at Deloitte, this method seems to be gaining steam. An accountant close to the situation gave us the rundown on the recognition programs at the firm:
• Applause Awards (whenever)
• Outstanding Performance Awards (whenever)
• Merit Bonuses (annual)
For the most part AAs ($100 to $500 – tax adjusted) and OPAs ($500 to $5,000 – non-tax adjusted) were frozen for the last 2 years; with MBs only being processed for 1s and sometimes 2s (we’re rated on a scale of 1 to 5 – 1 being the best, 5 the worst – with typically 5% 1s, 10% 2s, 80% 3s, 5% 4s and 5s).
Now that you have the background, there’s this:
Based upon what I’ve been hearing very recently, strong performers have been getting [Applause Awards] for $100 in the NE [Advisory] practice. In some limited instances, partners have also hinted at more money coming their way (seemingly in the [Outstanding Performance] realm). Seems like the partners are noticing that people, especially performers, are getting antsy; and are trying to keep the peace until compensations are adjusted in September…
Well! Good to see that Deloitte partners are taking their firm’s advice (combo of #2 and #5). This could work out well for those of you that are rockstars at Deloitte (and are easily swayed by monetary reward) but for the other 80% that fall into the unexceptional categories, you may just have the longer ladder to look forward to.
In the past week or so, merit increases have been communicated or reiterated by three of the Big 4. While the news of the resurrected raises is widespread, most people we’ve talked to (and commenters) are not believers. Most see it as a preventive measure to delay the exodus (or at least keep it within expected ranges).
Since the rest of the Big 4 have already been covered (KPMG, E&Y, PwC) we decided to get proactive on finding out the scoop on Deloitte. We contacted a reliable source and it turns out there may be some communication very soon:
[S]o far nothing. I’m going to an all-hands meeting tomorrow in NYC, so maybe they’ll mention something there. For now, all that I can really say is that there’s whole big bunch of people waiting to jump ship, pending the results of this year’s comp, so they better put some serious increases in…
So it’s safe to presume that if the Deloitte brass doesn’t communicate a satisfactory message, the streets may be flooded with Green Dots. If you’ve gotten guarantees, denials, or anything that remotely resembles an official word on this year’s Deloitte comp, get in touch.
KPMG’s newly announced Chairman John Veihmeyer knows that you’ve been anxious, so in a message to Klynveldians, Johnny gets right to the point, “I want to take a moment to address a question that I know is on the mind of every KPMG employee: Will there be raises and bonuses this year? The short answer to this question is ‘Yes.'”
For the “vast majority of our people” and bonuses will be available, “our goal is to enhance our variable compensation pool from last year—meaning higher bonuses than last year.”
How’s that for a Friday morning message?
As we reach the midpoint of FY 2010, I want to take a moment to address a question that I know is on the mind of every KPMG employee: Will there be raises and bonuses this year?
The short answer to this question is “Yes.”
As we communicated during this year’s town hall meetings, the business environment is showing measurable signs of improvement. In fact, I am pleased to report that thanks to your efforts the firm is slightly ahead of plan. So by year-end, we fully expect that the pickup in market and business conditions will drive compensation increases for the vast majority of our people. Also, assuming we meet our plan, as we are on track to do, our goal is to enhance our variable compensation pool from last year—meaning higher bonuses than last year for EP performers as well as bonuses for deserving SP performers. Assuring that we recognize and reward our best performers is an integral element of our compensation philosophy and a critical ingredient of the high-performance culture we intend to maintain.
We are optimistic. But along with this optimism, we must maintain realistic expectations. Keep in mind that our FY10 plan is more challenging in the second half, and reliant on significantly improved performance in the spring and summer.
What does this mean? It means that now more than ever, we must come together as a team to do our best work and make 2010 a successful year—one that brings the improved business results that enable us to restore the financial rewards that we all desire. If you’re in Audit, Tax, or Advisory, it means driving business and providing the highest-quality service to clients. If you’re in a Client Service Support role, it means providing our professionals and teams with effective tools, resources, and information they need to win business and deliver excellent service to clients. And all of us need to continue our Spend Smart efforts and do our parts to drive efficiencies in the way we operate.
Whatever the remainder of 2010 brings, you can be sure that KPMG remains committed to its philosophy of providing our people with an attractive and competitive total compensation package that differentiates exceptional performers with superior rewards. And, we remain fully committed to being an Employer of Choice and a great place to build your career.
Thanks for all your contributions to our firm’s success.
A little more from inside E&Y to round out the week. We got a tip earlier in the week that there was an oddly-timed town hall going on in Chicago this week. Our tipster indicated that the meetings usually occur after the June 30 year-end or in September.
We asked around and from the sounds of it, the meeting amounted to an extremely sober pep rally. The need for a little HR cheerleading is completely understandable, considering the month E&Y has had.
“[T]hey just talked about how they know morale is down, yet no plans for how to fix it. Additionally, they said there would be raises this year, but no mention of how large or small…[and] your basic HR ‘Thank’s for your help’ stuff.”
We haven’t heard the details for the cause “low morale” but it’s quite possible that it could be due, at least in part, to the ehmanlay rothersbay uckshowfay. Plus, busy season is in the home stretch and most people are just over it at this point. As far as fix for morale, our suggestions of Canadidan Tuxes, Timberlands and Hitler videos are obviously being ignored with extreme prejudice. We’re all out of suggestions. Maybe they aren’t the best ideas but at least we’re trying.
The silver lining here is that comp increases are still on the agenda after the initial announcement made by Steve Howe back in January. If they go back on this promise — we’re confident they won’t — you can just blame it on Dick Fuld.
There’s been some whispering about PwC moving up its compensation and adjustment time frame from September to July and that’s got people curious.
At first glance this makes sense because the firm has a June 30 fiscal year-end. PLUS! Since Bob Moritz has already made it abundantly clear that there will be raises for 2010 we figure everyone would be excited to hear that the bumps would be coming a little earlier this year.
However, since everyone likes to jump to conclusions over the slightest little change, we’ll indulge. There have already been whispers of layoffs at PwC here and there but nothing that we’ve been able to confirm so people are probably antsy. And if the adjustment date is moved up we’re sure people are worried that means layoffs will be happening sooner rather than later. We can’t read anyone’s mind but we’re thinking this should be in the ballpark…
But if you’re anxiety is well founded, tell us why or get in touch.
UPDATE, a shade before 1 pm: One of our sources inside PwC shared their thoughts with us:
I think the overall feeling was positive…it will probably make some people happy (depending on the %) and hopefully limit the higher performers from going out into the market, however, it may also help some people look for jobs sooner (i.e. they don’t have to wait until September now, if the raises are low). Most people still have a lot of questions, including the estimate of the increase for each band of the rating system, what the bonus pool is going to look like, and although that is not being paid until September, whether we will know what the bonus amounts are in July.