Does anybody have an idea how partners at these firms are compensated. I honestly have no idea what salary and other comp is but I think it is more than I had originally imagined. I have a buddy's father whose whole career was spent at a Big 4 firm as an auditor and he was a partner for 20-25 years, recently retired.
Any idea how these guys are compensated ?
Salaries for Big 4 Employees - Associate to Partner
Let's take a look at some compensation figures from senior associate to senior partner. The title column indicates seniority level. The years column denotes number years at the firm. This helps illustrate the increase in total compensation between bumps in title. This post is adopted from @Going Concern".
| Title | Year | Total Compensation |
|---|---|---|
| Senior Associate | 3 | 62,000 |
| Senior Associate | 4 | 67,000 |
| Manager | 5 | 85,000 |
| Manager | 6 | 95,000 |
| Manager | 7 | 102,000 |
| Senior Manager | 8 | 135,000 |
| Senior Manager | 9 | 145,000 |
| Senior Manager | 10 | 155,000 |
| Senior Manager | 11 | 165,000 |
| Partner | 12 | 300,000 |
| Partner | 13 | 350,000 |
| Partner | 14 | 400,000 |
| Senior Partner | 15 | 450,000 |
The following quote from going concern addresses the jump in compensation from senior manager to first year partner,
$300k as a first-year partner is probably a little high, as is the jump from $165k to $300k.
All in all, it’s a decent place as any to start a debate and 17% for an average raise over the course of 15 years probably isn’t that far off.
That being said senior partner compensation can be as high as 700k. Compensation can vary depending on client book and office location.
User Winnsboro1952, a retired big 4 partner, shared details below:
I can answer your question as I am a retired big four partner. The retirement (pension only not including 401(k) and profit sharing balances as well as supplemental capital payouts) can vary according to whether or not the big 4 firm has a retirement plan. My pension alone is $230,000 plus $90K of supplemental payout plus 401(k) and profit sharing plus personal savings. I retired 10 years ago and I was making $1.3 million. Some partners made more and a lot made less. Average earnings per partner are now about $1million (quite a jump since my days). This is amazing since about 30% of the partners have been there less than 5 years and of course earn less. Top 10% would likely earn $2 million + Great career.
You can learn more about consulting salaries on WSO with the Wall Street Oasis Consulting Industry Report.
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http://www.hollandcpasearch.com/salary.html
http://goingconcern.com/post/what-can-you-expect-make-big-4-firm-over-1…
http://www.beyond.com/articles/an-insider-s-look-at-the-big-4-ranking-4…
http://big4bound.com/how-much-do-partners-really-make/
Good links, but the data varies. Holland Research overstates salaries for younger employees. That GoingConcern article way understates partner salary, as mentioned in comments. Big4Bound WAY overstates partner salaries. No Audit/Tax partner is making $3m without extra responsibilities (like leading a whole geographical area) and even then it's closer to $1.5 MAYBE $2 m.
Big Jim Turley made around $5 m all in (or so the rumor goes).
From what I have heard (albeit through the rumormill at work) is that you get a fairly significant percentage of an average of your high-three for the rest of your life
Wow. Thanks for the info.
Partners have a buy-in period when they're newly promoted. I'm not sure how much they contribute to the partnership, but they usually get a loan from the partnership that they will pay off over the subsequent few years.
Partner compensation is pretty guarded (officially) but it's most auditors have a pretty good guess. It varies greatly depending on location, but for pure audit, a new parter will likely make about $250k - $300k per year (not including contribution payback). A veteran partner can make around $500k - 700k in decent market, and a senior partner can make over $1m.
Retirement depends GREATLY upon the firm. At least one of the four has a pension, which pays out 60-75% (not sure) of the highest 3 years of salary average. The other firms, I'm not sure, but I besides 401k there may be other retirement benefits as well.
Double Post. Sorry.
Big 4 audit partner with huge account >3MM all in.
Source: Ex GFs father.
People like this guy are the exception, but I have to concede that these partners do exist.
I remember being told a stat, can't remember who told me other than it seemed valid, but less than 2% of Big 4 partners make 1mm+ and less than 10% make 500k+.
minimum, $500k
false
Currently work for a Big 4, can confirm Partner pension (assuming one retires fully vested) is calculated as:
[(Average of your 3 best years as a Partner) * 50%], but not to exceed $400k, every year from retirement until death.
As someone thinking of doing the Big4 -> MBA -> IB/MBB route, I'd like to ask: Do investment banks and management consultancies have similar pensions or retirement benefits? Because, honestly, the Partner pension is looking pretty attractive...
At one of the Big 4, a first year Partner makes $350k. They receive a $50k raise each year for the first 5 years, meaning that following their fifth year, a Partner is at $600k (and the $500k third year Partner comment above is correct). This is the floor, so a high-performing Partner may exceed those numbers. Depending on what age the Partner retires at, their pension fluctuates, but is typically between $200k - $400k per year. Tough job, but quite lucrative.
I can answer your question as I am a retired big four partner. The retirement (pension only not including 401(k) and profit sharing balances as well as supplemental capital payouts) can vary according to whether or not the big 4 firm has a retirement plan. My pension alone is $230,000 plus $90K of supplemental payout plus 401(k) and profit sharing plus personal savings. I retired 10 years ago and I was making $1.3 million. Some partners made more and a lot made less. Average earnings per partner are now about $1million (quite a jump since my days). This is amazing since about 30% of the partners have been there less than 5 years and of course earn less. Top 10% would likely earn $2 million + Great career.
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