Deciding How to Allocate Partner Income

Gavel resting on $100 bills8 aspects that might fall to your compensation committee.

By Marc Rosenberg

CPA firms have a habit of making frequent changes – some major and some minor – to their system and methodology of allocating partner income, just as a baseball team tweaks its roster of players during a long, grueling season.

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Because of this, firms are advised to keep the wording on partner compensation in their partner agreements as general as possible. This avoids the need to change the agreement every time the income allocation system is modified.