Compensation Model Revamped
Discover how Carl George Advisory transformed a firm’s outdated partner compensation model into a performance-driven structure. By aligning rewards with contributions, fostering transparency, and incentivizing growth, the firm achieved improved partner satisfaction, increased collaboration, and measurable business results.
Modernizing a Compensation Model
Recently, I worked with a firm that wanted to refine its partner compensation plan. Their existing plan was entirely formula-driven, focusing solely on metrics like production, billable hours, and realization rates.
While these are important factors, they’re not the whole picture in today’s compensation systems. The managing partner reached out to me, frustrated that their current approach wasn’t giving enough credit to other critical contributions, such as leadership, people development, and client service.
This created a fairness issue, as some partners felt their broader contributions to the firm weren’t being recognized.
Actions Taken
The firm’s leadership recognized that production metrics alone weren’t capturing the full value
partners brought to the table. They wanted a more holistic approach—one that balanced
measurable outcomes with subjective factors like people development, business development, and leadership contributions.
I helped them design and implement a new partner accountability and compensation system that addressed these gaps.
First, I worked with the team to create a framework for setting clear goals at the beginning of the year. These goals included both objective metrics, such as production and realization, and subjective factors, like leadership in developing team members or advancing firm initiatives.
This framework ensured that every partner’s contribution could be evaluated comprehensively.
Next, I introduced an evaluation process that took place not only at the end of the year but also during the year. This allowed the firm to provide ongoing feedback and to adjust course as needed. By combining annual reviews with mid-year check-ins, we created a system that promoted accountability and encouraged continuous improvement.
Finally, we redesigned the profit allocation process to reflect this broader scope. Rather than tying firm profits strictly to production metrics, we incorporated the evaluation of both objective and subjective goals. This approach gave appropriate weight to business development, client service, people development, and leadership contributions, all critical areas that drive a firm’s long-term success.
The result was a more equitable and motivating compensation plan. Partners now feel recognized for their full range of their contributions, which fostered greater engagement and alignment with the firm’s strategic goals. By measuring overall value—not just production—we created a system that truly rewarded the diverse ways partners helped build and strengthen the firm.
I helped them design and implement a new partner accountability and compensation system that addressed these gaps.
First, I worked with the team to create a framework for setting clear goals at the beginning of the year. These goals included both objective metrics, such as production and realization, and subjective factors, like leadership in developing team members or advancing firm initiatives.
This framework ensured that every partner’s contribution could be evaluated comprehensively.
Next, I introduced an evaluation process that took place not only at the end of the year but also during the year. This allowed the firm to provide ongoing feedback and to adjust course as needed. By combining annual reviews with mid-year check-ins, we created a system that promoted accountability and encouraged continuous improvement.
Finally, we redesigned the profit allocation process to reflect this broader scope. Rather than tying firm profits strictly to production metrics, we incorporated the evaluation of both objective and subjective goals. This approach gave appropriate weight to business development, client service, people development, and leadership contributions, all critical areas that drive a firm’s long-term success.
The result was a more equitable and motivating compensation plan. Partners now feel recognized for their full range of their contributions, which fostered greater engagement and alignment with the firm’s strategic goals. By measuring overall value—not just production—we created a system that truly rewarded the diverse ways partners helped build and strengthen the firm.
Testimonials
As we have grown organically and merged with other firms, we needed help from a practical standpoint. Carl was exactly what we needed. We have been working with Carl over the past years, and he is one of our most valuable resources. The advice he has given us has been invaluable.
I have had the privilege of working with Carl since 2021. Since then, he has provided much needed structure to our firm’s Compensation Committee and partner goals process, facilitated our partner retreats since 2022 and served as a coach to the Managing Partner and several senior leaders of the firm. His tailored strategies have assisted with the development of ASL’s growth plan and strengthened our corporate governance structure along the way. Thank you, Carl for sharing your wealth of experience, to help our firm and leadership team grow stronger.
We engaged Carl George over ten years ago to facilitate our firm’s strategic succession planning meetings as we were facing the challenge of turning the page from the firm’s second generation of shareholders to third generation of shareholders. What is best for the firm, our owners, our employees and our clients? Carl’s understanding of the profession as a whole, our position in the market place, and the sensitivity of succession assisted us in building out our firm’s vision and developing actionable strategies to help us get to where we decided to go. Carl has also served as trusted mentor to me as I transitioned into my position five or so years ago. As we move to the next chapter as a growing, fiercely independent accounting firm, we continue to work with Carl as we look to enhance our firm’s governance and shareholder evaluation processes, among other firm matters.
I have been working with Carl George for a several years as my personal coach. As a new managing partner, I was looking for someone who knew what it was like to manage and motivate people. He has incredible experience as a managing partner himself and has already dealt with the same issues I am working through, from partner compensation to evaluating merger candidates to aligning everyone’s goals for a common purpose. He has been an invaluable part of our team and success because he truly cares and wants to see you be successful.
As a young leader of a legacy firm, Carl has been an invaluable coach and resource for my growth. His relatable demeanor allows us to have candid conversations, so I can learn from his experience, ask questions, and be challenged in my thinking. The two years our firm has worked with Carl has accelerated my personal leadership development and put our firm on a sustainable path.
Carl brings just the right balance of experience, empathy, understanding and counsel to 1) help firms identify where they want to go and 2) walk with them on the path to get there. His knowledge of and insight into the profession is rare and is based on decades of experience in leadership and management of an accounting firm. His experiences have taught him approaches that work – and more importantly those that don’t – so firms he advises can accelerate their journey towards success while avoiding the many landmines along the way.
Clifton Gunderson did over 50 mergers during Carl’s tenure in management of the firm. Carl’s caring and approachable nature and ability to read between the lines and quickly grasp a firm’s important concerns were key reasons so many of our discussions resulted in successful transactions. He has the processes perfected in managing the complicated issues involved in bringing organizations together.
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