Last week, we threw out a thread to get Deloitte's compensation discussion going which really dived into nothing of particular importance other than the usual bickering. It's possible that the discussion jumped the gun a bit, but if nothing else it got people lathered up and anxious for more details. Thankfully, we now have more to share with you, specifically for the AERS Advisory group.
Let's start with some internal financials:
The key takeaway here is that, to no one's surprise, advisory continues to do well as we can see impressive growth in revenues, earnings, client services hours, and headcount for FY12 and you can see the group is planning for more in FY13.
Let's move on to the Compensation Process, shall we?
Unless I'm missing something, the information and methodology here is pretty standard, although seeing Blackstone and Plante Moran on the same list boggles the mind a bit. We also appreciate the subtle note about "anecdotal information."
Next is "Compensation-to-AIP Pay Mix." Trust me when I say that the slide isn't worth sharing; it basically shows that for managers and above, base compensation will make up 90% of total compensation while the AIP will be <10% or less. The presentation states that "This is not a 'low-cost' strategy, rather it allows us to better manage the impact of volatile economic conditions on our professionals and supports job security." Do you buy that?
Yes, yes. We're getting to the good stuff now. First, Base Salary Adjustments:
The first thing we noticed about this slide is that it doesn't include a comparison with the prior year. Luckily, we obtained similar slides last year and if you take a peek, you'll see that the merit increase guidance is a bit lower with 1-rated Senior Consultants topping out around 15% while last year's topped reached 20%. 2-rated and 3-rated Seniors also will see a dip. Sorry, boys and girls.
And now on to the AIP pool:
Again, no comparison with the prior year but the surprise is that the AIP percentage is actually better compared to last year. 1-rated Seniors top out just above 18% this year while last year the best you could do is around 17%. 2-raters will also do slightly better while 3-rated professionals will do slightly below last year.
All this info will probably only whet your appetites more, but hey, it's something.
If you have tax or audit details, we'd love to see them. For now, chew on these for a while.