For 2010, many partnerships and boards are considering adjusting partner compensation, perhaps in a different direction that in past years. This article will present some principles and models for consideration.
Compensation philosophies vary widely based on the composition of partners, but for the purposes of this article the assumption is that partners are "working partners" - in other words, practicing professionals, not paid corporate administrators. As such, there needs to be a blending of the partner's own "book of business" and overall firm objectives. The most effective way of blending these is through a tiered system of compensation. The accompanying table shows a typical tiered compensation structure for partners.
How a partnership views each one of these tiers or categories can vary, but the following principles should be considered:
To read the entire article click here: http://www.webcpa.com/ato_issues/24_3/new-ways-to-slice-the-pie-53433-1.html