The Multiple of Compensation Method, Fully Explained

Those who aren’t rainmakers still need to have their contributions recognized.

By Marc RosenbergExtreme close up of female hand with pen pointing on cash flow document.
Retirements & Buyouts

There are numerous methods used to calculate the goodwill payable to a retiring partner.

Multiple of compensation is the most common method, especially among firms with five or more partners. Each partner’s retirement benefits are equal to their compensation immediately prior to retirement times a predetermined and approved multiple.