by marc rosenberg
partner comp: art & science
here are five case studies to illustrate potential problems in partner compensation.
more on partner compensation: does compensation motivate performance? | why compensation and buyout plans must be synchronized | when partner vacation becomes excessive | management stipends: who, how and why | the 8 basics for data-based partner performance evaluations | crash course: operating a compensation committee | 11 points in designing a partner comp system | what partners earn and how they earn it
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the stressed-out mp. this seven-partner firm had recently changed from having the “mp decides” method of income allocation to usage of a compensation committee because the burden of allocating income was too stressful for the mp. the ensuing problems with the compensation committee, all solvable, were:
- mandatory rotation of cc members resulted in people on the cc who were not credible and used their role to boost their own income.
- no communication between the cc and the individual partners about expectations and income allocation.
- frequent, bitter arguments among cc members.