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Use Smart Compensation to Drive Partner Performance
Five management objectives to address.
By Domenick J. Esposito
8 Steps to Great
“Show me your compensation plan and I’ll show you your strategy.” – Dom Esposito
As you strive to become a mid-market sustainable brand, your firm needs to become a performance-driven organization if you want to take advantage of future opportunities and drive growth and profitability. An effective performance management and compensation plan (PMCP) is critical to making your firm’s strategic plan a reality.
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The basic premise is that compensation rewards first look to:
- how successful the entire firm is,
Loyalty Tax: Accounting’s Lose-Lose Incentive System | Big 4 Transparency
Employees lose stability and firms lose money. So why do we do it?
Sponsored by The Balanced Millionaire: The Advisor Edition by Dr. Jackie Meyer | See Today’s Special Offer
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Big 4 Transparency
By Dominic Piscopo, CPA
For CPA Trendlines
A growing body of compensation data suggests that accounting firms may be unintentionally penalizing their most loyal employees.
In a recent solo episode of the Big 4 Transparency, founder Dominic Piscopo unpacks what he calls the “loyalty tax” — the pay gap between internally promoted employees and externally hired peers performing the same role. Drawing on 2024–2025 compensation data from thousands of U.S. and Canadian professionals, Piscopo outlines how this structural imbalance is reshaping career incentives across the profession.
MORE Dominic Piscopo | MORE Private Equity | MORE Pay & Compensation
The loyalty tax, as defined in the episode, is the percentage difference in pay where externally hired employees earn more than internally promoted employees at the same level. According to the data, that gap is far from trivial. In the U.S., first-year senior associates hired externally earn roughly 6.3% more than internally promoted seniors, while first-year managers see an 8.9% premium. Even at the senior manager level, the gap persists. Canadian data shows a similar pattern, with especially pronounced spreads at the senior and senior manager levels.
The disparity is even more striking in consulting and advisory roles.
$175 Million Meets the K-1 Bottleneck
K1x is betting millions that AI can bring order to one of tax’s most stubborn bottlenecks.
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By Seth Fineberg
For CPA Trendlines
K1x is putting $175 million in new investment behind an expansion of its K-1 technology platform, with plans to accelerate product development, broaden its offerings and build a more standardized system for managing partnership tax data.
MORE K1x: K1x Secures $175 Million for Private Markets AI Tax Tech | Private Market Tax Is Heading for a Collision | The 3-Part Framework Firms Are Using to Fix K-1 Chaos | Why the Future of Tax Isn’t Compliance—It’s Timing | How to Turn K1 Problems into Profits with A.I. Automation | Break the K-1 Bottleneck | AI Tax App Crashes Financial Stocks on Wall Street | MORE A.I. | MORE CPA Trendlines Streaming Network
CEO John LaMancuso says the company is pushing beyond automating individual K-1 tasks. K1x wants to connect K-1 creation and aggregation into a unified platform that can move tax data among CPA firms, investment funds and investors with less manual handling.
“Start with the bottleneck, not the technology,” LaMancuso says.
CPA PE Deal Tracker™: The Next Deal Cycle Comes into View
By CPA Trendlines Research
Wall Street’s buying spree for accounting firms is cooling going into the fourth quarter of 2026, according to the CPA Trendlines CPA PE Deal Tracker™, as platform firms digest a two-year surge of acquisitions and the earliest investors, from three to five years ago, begin to cash out.
MORE Private Equity: Michael Hoover: Growth Without Discipline Comes at a Cost | Big 4 Transparency | CBIZ Told Grant Thornton No, No, No, Before Saying Yes | PE Already Knows Your Price. Do You? | How Private Equity Turns CPA Loyalty into Legal Risk | Ira Rosenbloom: PE Forces Firms to Pick a Future | The Disruptors | Allan Koltin: What Elite CPA Firms Do Differently | Gear Up for Growth
The October 2026 edition of the CPA PE Deal Tracker™ shows accounting’s private-equity deal flow easing in the third quarter, with 37 acquisitions in the U.S. and Canada, down from 42 a year earlier and a far cry from this year’s first-quarter surge of 58. The Tracker now counts 400 such deals in the U.S. and Canada since its records began in December 2016, plus 87 it has found elsewhere, for 487 worldwide, although its coverage outside North America is not systematic.
Advisory Includes More Than You Might Think
What do you see when you envision your future?
By Rory Henry
The Holistic Guide to Wealth Management
I work at a virtual family office called Arrowroot Family Office. Over the course of my career I have learned that family (and family dynamics) significantly shapes who we are and how we form relationships in life.
Research shows that one of the biggest drivers of family dynamics is the order in which each child is born. Birth order theory, developed by Alfred Adler in the 20th century, suggests that the order in which children are born can have a significant impact on their development and personality.
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