{"id":126676,"date":"2024-06-23t11:58:54","date_gmt":"2024-06-23t15:58:54","guid":{"rendered":"\/\/www.g005e.com\/?p=126676"},"modified":"2024-08-29t23:53:00","modified_gmt":"2024-08-30t03:53:00","slug":"how-firms-are-compensating-their-coos","status":"publish","type":"post","link":"\/\/www.g005e.com\/2024\/06\/23\/how-firms-are-compensating-their-coos\/","title":{"rendered":"how firms are compensating their coos"},"content":{"rendered":"
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real-life examples. about 29% are owners.<\/strong><\/p>\n by kristen rampe<\/em> more and more firms are exploring the benefits of adding a chief operating officer (coo) to their leadership ranks. the coo role often encompasses strategic cpa firm leadership, holding partners accountable, making decisions in line with the firm\u2019s strategy and overseeing all administrative functions.<\/p>\n <\/p>\n this position can significantly reduce the time client service partners spend attending to these duties. and often the coo can do them better, as they aren\u2019t distracted by the next fire drill from a high-profile accounting client. their only client is the firm. the challenge for traditional accounting firms, in which partners are the top producers and top earners, is how to fit a coo into your compensation system. whether or not your coo is an employee or an owner, they\u2019re a c-level player and command a requisite income. we conducted a quick poll of our readers to learn more about current practices with coos at cpa firms.<\/p>\n <\/a>coo: employee or owner?<\/strong><\/p>\n based on our poll, which included 65 responses indicating their firm currently has a coo, 71 percent of respondents reported their coo is an employee and 29 percent reported their coo is an owner. in the open-ended comments, several firms indicated that their coo was also a client service partner, or had been in the past.<\/p>\n what are coos earning? <\/strong><\/p>\n compensation levels for coos reported in our poll were varied. even within firms of similar revenue bands, coo comp ranged from under $100,000 to over $275,000. large firms, not surprisingly, concentrated on the higher end of this scale.<\/p>\n can an employee (non-owner) coo out-earn an equity partner?<\/strong><\/p>\n one of our questions was whether, philosophically, the coo could out-earn an equity partner. analyzing only the data from respondents who indicated their coo was not an owner, 21 percent said their coo could earn more than an equity owner.<\/p>\n there is certainly more to explore here. is the ability to earn a high total compensation package limited on principle? or on requested job duties not being as extensive as they could be, given either the firm\u2019s needs or the individual\u2019s capabilities? firms lucky enough to have a true strategic partner in their coo may benefit from questioning whether this limit makes sense at their firm. of course, many may choose to make such a talented person an owner, thereby \u201callowing\u201d them to earn more \u2013 or at least allowing access to owner-level compensation.<\/p>\n
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\nthe coo role can take on a variety of flavors, depending on firm size, need and the level of experience and skills of person they have placed in the role:<\/p>\n\n