Big 4 Partners - Salary/Risk Worth it?

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HardHitter
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Big 4 Partners - Salary/Risk Worth it?

Post by HardHitter » Wed Sep 21, 2016 2:43 pm

Hopefully there are a few Big 4 accounting firm Partners/former Partners on here as I'd appreciate your insight.

I've been with my Firm in our Advisory practice since graduating from college (7 years ago). I'm enjoy what I do and have a great work/life balance (40 hour weeks, work from home, etc.) which is rare to hear.

Looking forward in the next year or two, I will be up for Senior Manager and then after that, however many years, either Managing Director or buying into the Partnership.

So here are the questions:

1. What made you decide to go (or not go) the Partner track?
2. How does the compensation structure work an what is the average range that one could expect vs Managing Director? (Please note your State when referencing salary #s)
3. If you didn't go the Partner track, what did you decide to do and why was that decision made?
4. Any advice to give?

2tall4economy
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by 2tall4economy » Wed Sep 21, 2016 10:20 pm

Not a public accountant but I'm a CPA and have spent many hours with them over my career. You have a lot of time ahead of you, I'd keep that as your goal and focus on execution.
Expect to have little to no life on your way there and expect to be rewarded for sales and personality vs knowledge and skill.

That said, things will change dramatically in 7 years so it might not be what you want to so don't overthink it.

I will say I've never met anyone that turned down partner. Many that didn't make it and/or lied about it a little when pushed during interviews, but none that said no once offered.

I've never been shocked by their compensation in comparison to Fortune 500s execs of similar rank. Top partner pay is amazing but so is senior exec pay. Generally speaking you'll be in the top 1% or 2% of earners in the country. An old partner I used to work with would always say once you made it you became "rich" and it was just a matter of degrees. I think that's accurate.
You can do anything you want in life. The rub is that there are consequences.

jjface
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by jjface » Thu Sep 22, 2016 12:01 am

I find it hard to believe you work 40 hour weeks at a big 4 firm. I have worked for two and the recent grads work far more. The higher up you go the more you have to put in.

If you do then I'd count yourself very lucky and stay right where you are.

ahmadcpa
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by ahmadcpa » Thu Sep 22, 2016 1:21 am

I know a few who made it up there. It's typically a seven digit figure (yes seven). You will accumulate a lot of airline miles, eat Kobe and Wagyu and have a sexy secretary during work hours (and cough cough scort in after hours). You will sip expensive wines and meet and dine with the business elites.

However, you'll need to charge about 2,200 billable hours and probably charge an additional 2 to 300 hours in admin time. No personal life whatsoever and the ones that married ended up divorcing. Most eventually burnt out and quit in their early fifties. The ones that I know are in the attest division as opposed to advisory services and I am not sure how different the advisory services are. Good luck

Valuethinker
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by Valuethinker » Thu Sep 22, 2016 3:59 am

HardHitter wrote:Hopefully there are a few Big 4 accounting firm Partners/former Partners on here as I'd appreciate your insight.

I've been with my Firm in our Advisory practice since graduating from college (7 years ago). I'm enjoy what I do and have a great work/life balance (40 hour weeks, work from home, etc.) which is rare to hear.

Looking forward in the next year or two, I will be up for Senior Manager and then after that, however many years, either Managing Director or buying into the Partnership.

So here are the questions:

1. What made you decide to go (or not go) the Partner track?
2. How does the compensation structure work an what is the average range that one could expect vs Managing Director? (Please note your State when referencing salary #s)
3. If you didn't go the Partner track, what did you decide to do and why was that decision made?
4. Any advice to give?
I don't know of anyone in audit in Big 4 who hasn't sold their soul to their job. I don't work in the field but have had friends and colleagues who did.

That's why 90%+ of them leave. When it becomes clear they will not make partner or the toll on personal life grows too great. There's usually quite a lot of travel. That depends. If you are in a Financial Services Practice you probably shuffle between NYC, Boston, Charlotte, Chicago, LA, SF maybe-- plus offshore locations in Carribean* (and many of your clients are probably within 10 minutes walk of your office). Energy? You could well travel globally.

Partners work crazy hours but in a different way. They have to be on the road, marketing, constantly-- bringing in business is a big part of their remuneration structure. Lunches and dinners with client, opera, sports games at weekends etc. Plus making sure the Senior Associates, who actually manage the engagements, don't screw up and the client stays happy.

The leverage model requires lots of worker bees, and for every 5-10 of them a manager bee, and for every 5 of them, a partner. Throw in support staff and it's easy to see how you get to a 100-1 or maybe 250-1 ratio of employees to partners.

Probably by the time you are partner there is a lot you can do on weekend at home-- conference calls etc. Or go home on time, put kids to bed, then get back on the email and do some more work. They are constantly juggling their lives.

If you have international clients of course it gets tougher with time zone. With Europe and Middle East you make them stay late at the office whilst you call in office hours. West Coast and Asia I imagine it works the reverse (I am at the wrong end of that food chain with US ;-)).

$1m+ pa doesn't sound unreasonable. I imagine the top partner of say KPMG USA makes c. $5m?

Ironically it was the head of the worldwide practice of KMPG who retired, was told he had less than 6 months to live, and wrote a book about it, which is worth looking up.

* not as nice as it sounds. You won't be there in tourist season, you could well be there in hurricane season, and whilst the tourists party and do water sports, you have to go to work. Then in the evenings you either sit in your room and catch up on the email from home office, or sit in the hotel bar and get drunk. I had some really unpleasant trips to Luxembourg at one point, and whilst Jersey has lots to do as a tourist in summer, if you are stuck in St Helier on a Monday night in January, wondering whether your flight out will even be able to go.... Friends of mine did tech support in Grand Caymans during hurricane season...

dotnet
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by dotnet » Thu Sep 22, 2016 5:06 am

I'm not a partner but I work in the industry and know more than a few...

Most of the horror stories people are saying are not limited to partners. They're everyone in public accounting. You know your situation. Do your partners work 80 hours a week while you work 40? You'll be expected to do something similar to them.

My understanding is that if they offer you a director job, then they don't plan to make you partner. As someone said, it basically depends on if you can sell and your personality on if they want you into their club. The pie is only so big, and so there has to be insentive for them to give you s slice of it. And by the way, if you work 40 hours a week while all the partners are working 80, you're not on the partner track.

The partners I know work a lot, but the family life is up to you. You can work a lot without being a terrible father/mother or spending a night in the Caribbean in the hotel bar. I know several partners who are very good family member (parent and spouse). Some partners work less than the senior managers I know. No partner works more than any other person I know making $1M a year (not counting doctors)

SQRT
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by SQRT » Thu Sep 22, 2016 7:00 am

I was a CPA in public practice for about 10 years. Had doubts about getting invited to join the partnership so left for a job at a local large bank. Couldn't agree more that partnerships award business developers with the right personalities. Technical expertise is easy to find and not as rewarded. Been retired for 10 years so not as knowlegsable as others here about current comp levels, but they sound reasonable to me. I made much more at the bank than I would have as a E&Y partner, perhaps an order of magnitude more. You have to work hard and make personal compromises wherever you work if you want to be a top 1%'er.

My son-in-law is an under paid senior manager at Deloitte. I am constantly advising him to leave for industry.

BlackStrat
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by BlackStrat » Thu Sep 22, 2016 7:12 am

I read an article the other day speaking of H1B visa holders now moving into the accounting field in the US (much like tech workers already have). Like already mentioned, I would guess worldwide travel would be an even more prevalent requirement to manage offshore resources.

Mimmz
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by Mimmz » Thu Sep 22, 2016 7:45 am

ahmadcpa wrote:Most eventually burnt out and quit in their early fifties.
Forced retirement is generally between 50-55, and if you've been there long enough for a fully vested partner pension, that satisfies everyone's view of retiring well (generally mid-six figures).

I knew one MD in my Big 4 Advisory group who had supposedly turned down the opportunity to join the partnership - she retired early/mid 40's.

I decided the juice wasn't worth the squeeze, but left too early to know whether I would have been on a partner track or not. That carrot on the stick was ultimately one of the few things on the positive side of my T-chart analysis. I definitely am making more today and living a better balanced life today than if I had stuck around, but only time will really tell whether it was ultimately the best decision.

Steve723
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by Steve723 » Thu Sep 22, 2016 8:15 am

Well, so far it doesn't look like a single actual Partner or former Partner has responded! Perhaps they are too busy working.

Based on the other responses, it sounds like making Partner is not much different than reaching the highest levels in most large, global organizations in terms of the sacrifices required and compensation expected.

opus360
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by opus360 » Thu Sep 22, 2016 8:24 am

HardHitter wrote: I've been with my Firm in our Advisory practice since graduating from college (7 years ago). I'm enjoy what I do and have a great work/life balance (40 hour weeks, work from home, etc.) which is rare to hear.
I never heard of anyone working 40 hours a week and being a partner. If you do only 40, then of course it is worth it.

crazygrow
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by crazygrow » Thu Sep 22, 2016 1:24 pm

I worked a total of about 9 years spread between two of the big four. Had been indicated I was on partner track before I left and now have a few coworkers that are now partner. People are right on the work/home lifestyle - it can be tough. There are some that manage it well.

People are wrong on the compensation. Until you are partner for 10+ years killing yourself or bring in a few massive accounts, you won't reach $1M in take home. First year partners in Atlanta started in the $250k base and bonus would vary a lot from $50-$200k depending on the year. The biggest benefits (although not as good as they used to be) are the lifetime retirement benefits...

I probably make more now than those i left behind, but my guess is they will, if successful, get more value over their lifetime from their Big4 partnerships than my executive roles.

dubsem
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by dubsem » Thu Sep 22, 2016 1:47 pm

1. Decided the work/people weren't for me. Also, I didn't want to make sales/marketing of the firm my first priority.
2. Las Vegas partner told me incoming salary (in 2011) was $350K. As you would expect, salaries are much higher in larger markets.
3. Left for industry, comparable salary and fewer hours/less on-demand.
4. Is the juice worth the squeeze?
G.O.O.D.

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Kenkat
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by Kenkat » Thu Sep 22, 2016 2:36 pm

My experience goes back pretty long ago to when it was still the Big-8. I won't repeat the comments around long hours, travel, strain on family and personal life except to say I also saw and heard that frequently.

What I will add is that not everyone who wants to become partner gets to become partner. Many people make Senior Manager and then end up leaving to take jobs at other companies. Often, these are high level jobs as people who make Senior Manager are typically pretty accomplished. Some leave on their own, but in many cases the reach to make partner falls short and they are what we used to call "counseled out". Only about 1 in 20 makes it to the partner level; there just are not enough associates in the organization to support a lot of partners. That was my experience at least.

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White Coat Investor
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by White Coat Investor » Thu Sep 22, 2016 4:22 pm

dotnet wrote: No partner works more than any other person I know making $1M a year (not counting doctors)
And there aren't very many of those.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

HardHitter
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by HardHitter » Thu Sep 22, 2016 5:13 pm

Appreciate the feedback:

1. To address those saying 40/hr week is not right, it depends. In audit, yes, no way you only work 40 hours a week. In advisory, in my specific line of work, 40 hours has been consistent. I have a great work/life balance of being in the office/leaving whenever I want. So long that the Client is happy and the deliverable are on time and quality, there is no management of where or how much work is being done. Believe me, I wouldn't have lasted 7+ years with the Firm if I was working audit hours...don't see why and don't see how people do it.

2. Someone said in a response that becoming a Partner/higher up isn't really about your skill set but about who you know and how you sell. This is the one "concern" I would say is not wanting to become a sales man. At my position, it is all about Client relations right now and sooner or later, I will be expected to bring in additional new revenue streams.

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yangtui
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by yangtui » Thu Sep 22, 2016 5:15 pm

crazygrow wrote:
People are wrong on the compensation. Until you are partner for 10+ years killing yourself or bring in a few massive accounts, you won't reach $1M in take home. First year partners in Atlanta started in the $250k base and bonus would vary a lot from $50-$200k depending on the year. The biggest benefits (although not as good as they used to be) are the lifetime retirement benefits...
This seems to be about right from my experience in public accounting. Outside of management level partners and practice leaders most partners are probably in the low to mid 6 figure range.

toumata
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by toumata » Thu Sep 22, 2016 7:41 pm

HardHitter wrote:Appreciate the feedback:

1. To address those saying 40/hr week is not right, it depends. In audit, yes, no way you only work 40 hours a week. In advisory, in my specific line of work, 40 hours has been consistent. I have a great work/life balance of being in the office/leaving whenever I want. So long that the Client is happy and the deliverable are on time and quality, there is no management of where or how much work is being done. Believe me, I wouldn't have lasted 7+ years with the Firm if I was working audit hours...don't see why and don't see how people do it.
Sounds like staff aug... Sweet gig while you have it, but can make going back to "the grind" on other engagements very challenging.

JeepDaze
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by JeepDaze » Thu Sep 22, 2016 9:04 pm

HardHitter wrote:Hopefully there are a few Big 4 accounting firm Partners/former Partners on here as I'd appreciate your insight.

I've been with my Firm in our Advisory practice since graduating from college (7 years ago). I'm enjoy what I do and have a great work/life balance (40 hour weeks, work from home, etc.) which is rare to hear.

Looking forward in the next year or two, I will be up for Senior Manager and then after that, however many years, either Managing Director or buying into the Partnership.

So here are the questions:

1. What made you decide to go (or not go) the Partner track?
2. How does the compensation structure work an what is the average range that one could expect vs Managing Director? (Please note your State when referencing salary #s)
3. If you didn't go the Partner track, what did you decide to do and why was that decision made?
4. Any advice to give?
I'm a Senior Manager in a Big 4 Firm. I've worked at the same firm for 20 years. I explicitly told my boss (who is a Partner) that I have zero desire to move up to the Managing Director or Partner level. I'm content staying at the Senior Manager level because I hate sales and I know I would not be successful if I was put into a sales heavy role where my technical expertise would be be difficult diminished. My boss is totally on board and cool with it. Long term senior managers (like 25 year plus) can make over $300k a year in Big 4 firms (advisory side). That'd plenty of $$ to live a very comfortable life without having to sell your soul or completely change your personality to succeed at your job. To each his own.

HardHitter
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by HardHitter » Thu Sep 22, 2016 11:05 pm

JeepDaze wrote:I'm a Senior Manager in a Big 4 Firm. I've worked at the same firm for 20 years. I explicitly told my boss (who is a Partner) that I have zero desire to move up to the Managing Director or Partner level. I'm content staying at the Senior Manager level because I hate sales and I know I would not be successful if I was put into a sales heavy role where my technical expertise would be be difficult diminished. My boss is totally on board and cool with it. Long term senior managers (like 25 year plus) can make over $300k a year in Big 4 firms (advisory side). That'd plenty of $$ to live a very comfortable life without having to sell your soul or completely change your personality to succeed at your job. To each his own.
Interesting concept. The Firm supports this? What is your average annual compensation increase if you don't progress?

This is the difficulty that I have in my current position. I am very interested in the details. Knowing how everything works/ties out and have great attention to detail. I've seen the further I progress up the chain, the more leadership says to "step out of the weeds" which diminishes my knowledge

jjface
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by jjface » Thu Sep 22, 2016 11:21 pm

JeepDaze wrote:
HardHitter wrote:Hopefully there are a few Big 4 accounting firm Partners/former Partners on here as I'd appreciate your insight.

I've been with my Firm in our Advisory practice since graduating from college (7 years ago). I'm enjoy what I do and have a great work/life balance (40 hour weeks, work from home, etc.) which is rare to hear.

Looking forward in the next year or two, I will be up for Senior Manager and then after that, however many years, either Managing Director or buying into the Partnership.

So here are the questions:

1. What made you decide to go (or not go) the Partner track?
2. How does the compensation structure work an what is the average range that one could expect vs Managing Director? (Please note your State when referencing salary #s)
3. If you didn't go the Partner track, what did you decide to do and why was that decision made?
4. Any advice to give?
I'm a Senior Manager in a Big 4 Firm. I've worked at the same firm for 20 years. I explicitly told my boss (who is a Partner) that I have zero desire to move up to the Managing Director or Partner level. I'm content staying at the Senior Manager level because I hate sales and I know I would not be successful if I was put into a sales heavy role where my technical expertise would be be difficult diminished. My boss is totally on board and cool with it. Long term senior managers (like 25 year plus) can make over $300k a year in Big 4 firms (advisory side). That'd plenty of $$ to live a very comfortable life without having to sell your soul or completely change your personality to succeed at your job. To each his own.
I'd say your situation is very rare. I was even being pushed to sell at an assistant manager level and the same went for everyone I knew. It just wasn't possible to be so focused on the technical side especially at a senior level. Sales is a big part of the business at all but the lowest levels. I would imagine most senior managers spend more than half of their time in sales and managing relationships. Perhaps you are in a particularly niche and technical area or there are others who are luckily more sales focused in your area. Not selling your soul or changing your personality is rare in this line of work! Glad it is working out for you.

JeepDaze
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Re: Big 4 Partners - Salary/Risk Worth it?

Post by JeepDaze » Fri Sep 23, 2016 6:28 am

jjface wrote:
JeepDaze wrote:
HardHitter wrote:Hopefully there are a few Big 4 accounting firm Partners/former Partners on here as I'd appreciate your insight.

I've been with my Firm in our Advisory practice since graduating from college (7 years ago). I'm enjoy what I do and have a great work/life balance (40 hour weeks, work from home, etc.) which is rare to hear.

Looking forward in the next year or two, I will be up for Senior Manager and then after that, however many years, either Managing Director or buying into the Partnership.

So here are the questions:

1. What made you decide to go (or not go) the Partner track?
2. How does the compensation structure work an what is the average range that one could expect vs Managing Director? (Please note your State when referencing salary #s)
3. If you didn't go the Partner track, what did you decide to do and why was that decision made?
4. Any advice to give?
I'm a Senior Manager in a Big 4 Firm. I've worked at the same firm for 20 years. I explicitly told my boss (who is a Partner) that I have zero desire to move up to the Managing Director or Partner level. I'm content staying at the Senior Manager level because I hate sales and I know I would not be successful if I was put into a sales heavy role where my technical expertise would be be difficult diminished. My boss is totally on board and cool with it. Long term senior managers (like 25 year plus) can make over $300k a year in Big 4 firms (advisory side). That'd plenty of $$ to live a very comfortable life without having to sell your soul or completely change your personality to succeed at your job. To each his own.
I'd say your situation is very rare. I was even being pushed to sell at an assistant manager level and the same went for everyone I knew. It just wasn't possible to be so focused on the technical side especially at a senior level. Sales is a big part of the business at all but the lowest levels. I would imagine most senior managers spend more than half of their time in sales and managing relationships. Perhaps you are in a particularly niche and technical area or there are others who are luckily more sales focused in your area. Not selling your soul or changing your personality is rare in this line of work! Glad it is working out for you.
Yes, the business line I work in is niche and requires senior level expertise to execute the projects. Think boutique economic consulting shop. It's not like I do zero sales. I still bring in business, it's the reality of the industry. But I still get credit for being chargeable.

Responding to HardHitter: yes, the Firm supports this because my niche group has the business model that requires it. Comp increases will start to diminish over time, until you hit the upper end of the band for your level. My understanding is that the band is quasi based on the lower end of the band for the level above you (i.e., you can't make more than a Managing Director in your office).

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