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So much bad info here. For Mgmt consulting, Cash equivalent comp at Big 4 for a second year is usually about $450-550k prior to tax, contributions, loan repayment, etc. MBB second year is between $700-1M. The former is less individual-performance driven as the comp is on a fairly set schedule. At traditional strategy houses comp can be pretty variable. At Big 4, you also accumulate a pension; at MBB, you do not. At Big 4, you have the stability of tax/audit practice revenue. At MBB, much more sensitive to commercial markets/economy.
Was a partner at Deloitte for 5 years, 2011-2016, advisory/consulting side and ended up owning a very large P&L my last year. From memory, gross numbers below by year (incl bonus)
$390k -> $450k -> $525k -> $585k -> $950k
The Big 4 retirement amount is correlated to your cumulative earnings. So “swooping in” in your late 40’s as opposed to 5-10 years earlier reduces a lot of your pension’s potential value. I’ve modeled the MBB vs Big 4 partnership value prop a few different ways. In general, the case swings positive towards Big 4 if you’re going to be a consulting partner 15+ years. 10 or less favors MBB. Between 10-15, it’s highly sensitive to many factors that are unique to the individual and the market
I don't really know what that info does for you
1. Net comp will vary wildly depending of life circumstances
2. “Every state taxes” aren’t that scary because income is divided/allocated across them.
3. The answer varies wildly by firm. New Partners at Big4 seem to make $300-400k gross. For us it’s close to (or over) seven figures
4. Even if marginal rate is 55% (which sounds too high since SS maxes out well before then), a bunch of the money is taxed at lower rates on the way through the brackets. I’d guess effective rate is closer to 40%
P2 is closer to what we saw. First year average Advisory partner got $525k target last year and we exceed plan so they hit more than that. If you’re in Deal Advisory/strategy you do better, if in risk you do worse. If you’re in NYC you do better, if in Cleveland, you do worse. In our firm you have to do MD, so you’re not far off the other Big 4 where it’s SM to partner and ED is a different path when comparing first year partner to first year MD take home.
But like someone else said, I don’t know what that does for you. I assume you are wondering about cash flow, but the nature of Big 4 is lots of forced savings and comfortable comp. and that’s beyond just the pension. You end up with a big nut in your partner account as well. All while having plenty for lifestyle. Different model.
P2 - is the pension that rich? Starting Partner comp for us is 2x B4... and starts 5-10 years earlier. Where are you finding returns that much above market? Something doesn’t fit
What percentage of MBB partners stay ten or more years? Much larger percentage at B4, so if the relevant model is of typical career earnings, Which admittedly could get slippery slopey, but...
Again the pension is just one of many long term comp vehicles at B4, and, depending on the firm and how long you’re partner, may not be the most material one. Collectively, however, for those out past the 10-15 year point the total rewards are pretty significant, so P2’s analysis feels about right to me.
Agree. Time value of money is important. I was assuming OP was asking about a direct admit partnership offer, which is also what I was considering somewhat recently.
For the record, I think for “similar business/talent models”, partner path for Big 4 Strategy/Mgmt consulting is closer to 8-10 years from MBA. Your 12-14 estimate is more appropriate for Big 4 businesses in the portfolio that are larger leverage, lower margin, and higher scale- typically not strategy/management side, but more in the execution-oriented ops/process/tech consulting practices.
$300k
In Big 4? Year 2? Take home? $200k. $400-450 comp post taxes insurance 401k loan repayment.
MC1- did you mean net on number 2??? 300k gross is senior manager/director money..
P2. So to OPs qn - likely Big4 - gross is $450 ish (I’m assuming you’re at D-end not at lower PWC-end). After everything take home is what, $200k?
Thank you Partner 2, appreciate the info, so to summarize ball park 200k after taxes,healthcare in hand and a promise of a big retirement $
BCG1- I think 2x is in a pretty extreme case. My Mck and BCG friends made about $700-800k their first year. My PwC and Deloitte friends made about $500-550k. Time of initiating conversation partner earnings is not relevant in my model as I’m comparing partner offer with partner offer as a baseline; not associate or consultant offers with expected “path to partner” timing. And yes it is not uncommon for a Big 4 partner with 20 years of service to retire with a pension in the $300-400k+ realm along with many other forms of vested deferred comp. But, as you noted, there are many other ways to earn in the market so certainly there are many other factors to consider
Just $300k? A bit disheartening given the difficulty of reaching the partner level. So many hoops to jump through...
So, to answer the question correctly, OP, you need to say at which firm...
First have to find a firm that will hire me as a partner, let’s see if MBB will hire me and then towards my late 40s swoop into Big 4 for that retirement money ..:)
Thanks. Main thing is that timing matters a lot to any practical application of this analysis. Unless you’re already a partner looking to lateral, timeline to partner (and comp on that runway) matters a ton. Especially if MBA to partner is 12-14 years at Big4 and 6-8 at MBB. That’s millions of dollars and offsets years of pension.
How would partner levels, years, vs compensation look like in Europe? Do you see any big differences between B4 and MBB in Europe vs USA?