Updating Partner Compensation Systems at Accounting Firms: How to Plan and Implement a Change
LP Partner Russell Shapiro recently interviewed Kristen Rampe, Managing Partner of Rosenberg Associates, a consulting firm that serves the accounting industry. Kristen is known for her expertise in helping CPA firms evaluate and restructure their partner compensation systems. In this informative and practical conversation, Russell and Kristen discuss many of the questions that arise in these sensitive transitions, including:
- How do you know if a firm’s compensation system is not working?
- How can firms incentivize and reward partners for delivering value to the firm that goes beyond straightforward revenue generation?
- What are the steps a company needs to take to redesign its compensation system?
- How can companies address a lack of buy-in with reluctant partners?
- How should percentage interest be taken into account in a new compensation system?
- How is the presence of private equity in this market affecting firms’ decisions around compensation?
- What is the role of the managing partner in driving a new compensation system forward?
- What is involved in implementing a new compensation system?
- Who should serve on the compensation committee, and how should the committee be assembled?
- Should a compensation system be open or closed?
- How should firms approach compensation for partners who are near retirement?
- What role should bonuses play in a compensation system?
- What is the role of compensation bands or tiers?
- Should there be a ratio of highest to lowest partner compensation?