By Marc Rosenberg
Partner Comp: Art & Science
Here are five case studies to illustrate potential problems in partner compensation.
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The Stressed-out MP. This seven-partner firm had recently changed from having the “MP decides” method of income allocation to usage of a compensation committee because the burden of allocating income was too stressful for the MP. The ensuing problems with the compensation committee, all solvable, were:
- Mandatory rotation of CC members resulted in people on the CC who were not credible and used their role to boost their own income.
- No communication between the CC and the individual partners about expectations and income allocation.
- Frequent, bitter arguments among CC members.