Partner question: is it true that your first year as a partner you take a pay cut because of you buy in? Someone told me that first year partners make a low compensation amount their first year cont..

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I am exactly break even year 1

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There is a lot of confusion.

A new partner ALWAYS has a comp increase vs their prior year as a sr manager director.

People on this thread are referring to cash flow. And the cash flow situation is different in different firms and for different people. There are several references in this thread to cash outflow for capital buy in. A few comments. First, this becomes savings for the partner. In many cases this investment earns interest. It is then paid back at retirement. This is simply redirecting cash and alters disposable income. Second, some people need loans and other dont. This is a personal cash issue partner by partner. The need to borrow money isnt about comp. Its about cash flow.

The bottom line, all new partners. earn more money (and if anyone nets less after self employment tax and self funded medical insurance, then its an anomoly or their firm made a comp error with new partner comp).

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A lot of times it is the same cash flow, or a little less, then senior manager for the first few years, even though comp rises on paper. This is because of the buy in, becoming taxable in every state the firm practices, losing 125 plans, becoming taxable on medical insurance, etc.

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Remember that none of us are complaining here. We are answering questions that are being asked by people who have not yet joined the ranks, and are looking for information

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And even take a huge pay cut that could be compared to a manager 1 salary. Is this true or Nah? - heard it around my office at EY

you take a loan

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Dear fellow bowlers, need your suggestions.
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