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You could make $2M if you had a proven track record and book of business, were able to lead a major account or practice, and if you were in a practice with a sufficiently high margin profile. For example if you were a deals or strategy partner consistently selling and delivering $8-10M a year.
If you are coming in from another region and not bringing any US clients the odds are pretty low that you would even be considered to be hired unless you were in a very hot practice area and a well known expert.
Ha - unless you are a complete rainmaker but probably no where near it with the incoming changes in the models - most big 4 now trying to limit equity partner roles. I’ve heard McKinsey is in at one of the big 4 trying to make a plan to Accenture-ise them. You are probably looking at $1.2 to $1.5m
Move to a very limited equity partner model - many more salaried MDs and a step in between of a salaried partner. Taking the overall leadership costs down aligned to the lower margin work and productisation of many offerings.
1.2 if 10 and 1.5 if 15 yrs experience
Agree with Principal 1. Coming from UAE with no relationships in US, it will be difficult to get partner position. But if you do, $1.5M is more reasonable in a strategy role and lower in other. Btw how does this compare to salary is UAE where you don’t pay taxes?
Oh are yuh a US citizen ? If not it will be challenging at the moment
Depends on the firm. Highest D, then P then E then K. 1.5 total comp at D isn’t unreasonable but getting an equity P entry from outside the market is hard, you need a strong network.
I’m not familiar with K1 partnership at B4. Is the “take-home” of that $1.2-1.5m going to be 45-50% after all the various SE taxes etc (effectively $500-700k)? I know benefits such as healthcare are not covered as part of the K1 employment. What about paying into the B4 pension or 401k?
I have a senior leader sponsoring. So the offer is there. Im just not certain of what the compensation will be.
Then you found a unicorn and better ride it to the bank. The numbers you have above were possible in 2022. In today's market the company has the power and all the big 4 are trimming partner ranks and stratifying the compensation model.
In my experience a newly hired partner with that kind of prior tenure would be more around 1m USD at that experience with equity incentives or bonus tied to business outcomes. That could boose overall TC to 1.2 or 1.5 with aggressive business targets.
I won't say $2m is impossible but it would take a very strong sponsorship network in a high demand space tied to aggressive growth targets. The intent with that kind of hire typically is incoming with a book of business AND incremental revenue tracking where existing client base "doesn't count".
Take home will be net of a lot of things largely outside your control:
- Federal income taxes
- State income taxes (home state)
- State income taxes (other states the partnership works in)
- Local income taxes (usually collected by state if applicable)
- Foreign income taxes (if the partnership is subject to)
- Self employment taxes
- Social security
- Medicare
- Health insurance (as an owner you pay this)
- Other insurances (eye, umbrella, legal, etc)
- Mandatory retirement contributions
- Elective retirement contributions (401k, etc)
Most Big 4 retirement programs are not officially pensions and are not funded like an account. Their cost comes out every year from firm profits before they are distributed to partners. Just like another business cost.
With US tax rates and healthcare costs you could easily see 40-50% of top line pay go to the items above. Some, like retirement savings, stay with you and are merely deferring tax. Not all costs are equal.
I’ve found my all in tax rate to be 40% and I am in a no state income tax state.