Production isn’t all that matters.
By Marc Rosenberg
The Rosenberg Practice Management Library
Increasingly, CPA firms are adopting the compensation committee system for allocating partner income. Firms are finding that systems such as formulas, pay based on ownership percentage or pay-equal no longer work.
MORE: Voting on Ownership Basis? Three Better Methods | What Partners Do and Don’t Deserve | Tell Potentials What Partnership Takes | Fifteen Big Questions for Your Next Strategy Session | Five Steps to Transition to Partnership | Disturb the Present to Improve the Future
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If there is one overarching cause for this significant trend, it’s that firms are understanding that their partners need to be something more than production machines. In addition to bringing in business, managing a client base and working billable hours (all of which continue to be important values in a compensation committee), partners need to excel in intangible areas such as helping staff grow and develop, developing specialized expertise and teamwork. The compensation committee is one of the best systems available to CPA firms to allocate income based on this diverse array of performance criteria.
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