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Salary & Bonus Ethical Question

2,535 Views | 27 Replies | Last: 5 hrs ago by Beckdiesel03
AgTDub
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4:49p, 1/4/25
AG
Wanted to get some input to try and make sense of this in my head with regard to a situation with my wife's employer.

She accepted her job a few years ago at a salary of "X" plus performance bonus based on company and personal performance. This is a company(public accounting) that certain times of the year mandates significant overtime and routinely fires people for not meeting the required hours. In addition, the partners seem to be extremely cold and uncaring towards employees in general most recently evidenced by firing a person the day before their wedding, and another one a couple days before Christmas. Not for some heinous act by the employees either, just "didn't work out" kinda thing.

Last year, the company announced that they were slightly bumping everyone's salary and doing away with any bonuses going forward.

Due to a change in our family dynamics, my wife recently requested to only be required to adhere to a 40hr week. Her firm said "that's fine but we're deducting the raise you got last year since you won't be working OT and there is still no bonus".

I'm not sure how to articulate it exactly but something about this doesn't sit right with me. I also am in a very different industry(commercial construction) so I don't know if this type of thing is typical in the accounting world.

Just seems to me that a "salary" would typically include OT and that bonuses would be based on firm profits as well as going "above and beyond". I don't see the incentive in doing more than the minimum required if you know there is no potential for additional reward. She is currently 1 level below "Partner" and has no desire for that promotion due to the 25 year commitment they require their partners to make. She is a licensed CPA with 12 years of public accounting under her belt.

Curious as to yalls opinions.
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ktownag08
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8:23p, 1/4/25
AG
Is there some reason you didn't share keeping her from looking elsewhere? It doesn't sound like a good place to work, and it wouldn't sit well with me either.

My company adjusted bonus structures when reclassifying folks from exempt to non-exempt (happened based on change in law), but basically ensured the employees will make equal or more than where they started.
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AgTDub
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9:19p, 1/4/25
AG
Mainly because the company does allow her to work from home 2 days per week along with the fact that we're currently trying to grow our family and they provide 2 months of paid maternity leave.

She says she wouldn't feel right starting at a new company and then going on an extended leave relatively soon when she has a baby.
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DallasAg 94
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In reply to AgTDub • 11:22p, 1/4/25
Sorry, but I giggled a little bit reading this. That is the public accounting world I know.

First, not to be rude, but I'm hoping this wasn't a surprise to your wife, if she is a CPA and has been in public accounting for 12 years.

Second... it strikes me as surprising that you've been married to a CPA working in a public accounting firm for 12 years and you are surprised by this.

Disclaimer - I mostly dated Acct majors at A&M and married a CPA who graduated from A&M and worked for one of the ... what is now Big4?!

In public accounting ... you are a Billable Hours. Your Billable Hour is either profitable or not. If you are not profitable... you get culled. I reminded her often. "How many hours did you work? How many were Billable?" 30 mins on the phone mentoring a new hire was not Billable. It was free labor because she was hourly.

The most recent firm she worked for quantified "Full Time" as 55 hrs. Not 40. So, if they paid you $120K, it was a $42/hr rate. $42X55x52 = $120K+/-. So, as an example... if your wife wanted to work 40hrs... she was only going to get paid for 40hrs. $87K.

If your wife is 1 level below partner, and she was working less than 60hrs/wk... that'd be surprising.

My wife quit working while we had a family. Once the kids all started driving, she jumped back part time for a family friend in a small firm. It was supposed to be 25-30hrs. I told her I've never heard of a "part time" accountant. They're a unicorn that doesn't exist. I think the industry has 60% of what they need in terms of CPAs. There is ALWAYS work to do and there is never enough people to do it. Sure enough, she'd find herself in the 40-45hrs range. Well, she was billable. The Firm makes a margin on her hours and because she was part time, they paid her under market but billed her for a level or two higher than she was... because that was the level work she did. She ultimately left. Once we did our Tax Return and she realized her income stacked on mine put her income at a higher tax rate, the Net just wasn't justifiable.

The Accounting world is hard and grueling. And you can make some serious money. Did I mention it was grueling?! It would not surprise me if your wife notifies them she is pregnant, they'll dismiss her before she gets to maternity leave. It isn't just that they are cold... she is just a Billable resource on a ledger. No more. No less.
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DallasAg 94
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In reply to ktownag08 • 11:25p, 1/4/25
In my experience... there are only 2 types of public accounting firms. Those that are miserable to their employees... and those that are more miserable to their employees.

What makes one firm less miserable is the friendships you have.
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Allen Aggie
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In reply to DallasAg 94 • 4:12a, 1/5/25
AG
DallasAg 94 said:
Sorry, but I giggled a little bit reading this. That is the public accounting world I know.

First, not to be rude, but I'm hoping this wasn't a surprise to your wife, if she is a CPA and has been in public accounting for 12 years.

Second... it strikes me as surprising that you've been married to a CPA working in a public accounting firm for 12 years and you are surprised by this.

Disclaimer - I mostly dated Acct majors at A&M and married a CPA who graduated from A&M and worked for one of the ... what is now Big4?!

In public accounting ... you are a Billable Hours. Your Billable Hour is either profitable or not. If you are not profitable... you get culled. I reminded her often. "How many hours did you work? How many were Billable?" 30 mins on the phone mentoring a new hire was not Billable. It was free labor because she was hourly.

The most recent firm she worked for quantified "Full Time" as 55 hrs. Not 40. So, if they paid you $120K, it was a $42/hr rate. $42X55x52 = $120K+/-. So, as an example... if your wife wanted to work 40hrs... she was only going to get paid for 40hrs. $87K.

If your wife is 1 level below partner, and she was working less than 60hrs/wk... that'd be surprising.

My wife quit working while we had a family. Once the kids all started driving, she jumped back part time for a family friend in a small firm. It was supposed to be 25-30hrs. I told her I've never heard of a "part time" accountant. They're a unicorn that doesn't exist. I think the industry has 60% of what they need in terms of CPAs. There is ALWAYS work to do and there is never enough people to do it. Sure enough, she'd find herself in the 40-45hrs range. Well, she was billable. The Firm makes a margin on her hours and because she was part time, they paid her under market but billed her for a level or two higher than she was... because that was the level work she did. She ultimately left. Once we did our Tax Return and she realized her income stacked on mine put her income at a higher tax rate, the Net just wasn't justifiable.

The Accounting world is hard and grueling. And you can make some serious money. Did I mention it was grueling?! It would not surprise me if your wife notifies them she is pregnant, they'll dismiss her before she gets to maternity leave. It isn't just that they are cold... she is just a Billable resource on a ledger. No more. No less.
I'd be interested to know what line of work you are in.
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AgTDub
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2:54p, 1/5/25
AG
We've only been married 6 months(2nd marriage for both of us) but this is her 3rd PA firm and the previous 2 both paid their employees for every hour of OT worked during tax season.

The post was about salary & bonus parameters, not asking for an education on the public accounting world. I'm very aware that pencil necked nerds are very prevalent in that industry and like to flex their newfound power over everyone beneath them to try and make up for all the trash cans and lockers they got stuffed in during their teenage years.

Not sure if you're familiar with the commercial construction industry but we're all basically "billable hours" so I'm very familiar. That said, the large national and 1 international GC's I've worked for were also generally good people who knew how to be a human being. In fact, the worst ones I've heard of from some of my former COSC classmates happened to be construction companies run by accountants and not construction folks for a lot of the same reasons. Too hard for too many of those types to be a normal friggin human being. Lucky me I guess…

Additionally, for the last 4 years I've run my own commercial construction business, quite successfully I might add, with almost no turnover and loyal employees and clients alike. I attribute most of that to the fact that I approach issues and decisions from a personal or human standpoint and not strictly a bottom line financial one. It's a job, it's not my life, it's not my employees life, we've all got friends, families, goals, struggles, etc… As a business owner, I want to be able to look myself in the mirror each day and not feel like giant piece of crap. When I'm on my deathbed someday, I want to know that I did things the right way and treated people with respect, dignity, honesty and fairness. That's going to matter much more than the few extra dollars I "could've" made.
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OnlyForNow
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In reply to AgTDub • 3:13p, 1/5/25
AG
The big wigs don't care about how their workers perceive them obviously…. And if the bonus/etc structure wasn't an agreed upon contract then it's moot and solely left up to the managers/owners (I.e. discretionary).

In my previous position i was a salaried exempt employee and got paid my hourly rate (salary/2,080) for any hours I worked. So working 50-60 hours a week I earned and got paid that increased rate. I don't know if any accounting firms do that, but it's something to look for.

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Beckdiesel03
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In reply to AgTDub • 8:07a, 1/6/25
AG
Where is this construction company and are you looking to hire this year?
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AgTDub
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In reply to Beckdiesel03 • 9:40a, 1/6/25
AG
Based in New Braunfels but have completed projects throughout the I35 corridor from Austin to SA. Not currently a need for any supers or PMs but that can change quickly.
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TXAG 05
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1:37p, 1/6/25
AG
Being the devil's advocate here, but why should they pay her more/give bonuses when she is wanting to do less work than others? Plus not wanting to go into the office everyday?
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AgTDub
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In reply to TXAG 05 • 2:01p, 1/6/25
AG
Nobody in the company is required to be in office more than 3 days per week.

I agree with what you're saying though, it just doesn't work both ways. If the client accounts she is responsible for require MORE overtime than those of her peers within the company she is not compensated for that due to them eliminating performance bonuses.

To me, it would make sense if the company said, "we're going to pay you "x" amount based on a 40hr week. If you go over that, you'll be compensated at a rate of "x" amount per hour.

As it stands, the firm is reaping a crapload of extra money from their clients for all of the OT required which is all billed to the client though none of that is shared with the individuals doing the work. The employees make the same amount whether they work, 40, 60 or 80+ hours per week. It's not like she requested to only work 30 hours per week. Where is the incentive?

When we first started dating, they were required to bill 50 hours per week. One week, she could only justify 49. The following Monday she got called on the carpet about it and they demanded to know if there was an issue and why she didn't work the required hours. Never mind the fact that ALL of her work had been completed.
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Milwaukees Best Light
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4:33p, 1/6/25
AG
Comes a time when you gotta choose, climb the corporate ladder or be available for your family. Those two goals don't usually go together. Sounds like she might be at that fork in the road.
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TXAG 05
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4:43p, 1/6/25
AG
I get what you are saying, and I'm sure you know this, but if you are salary, you get paid what you get paid, no matter how many hours you work, overtime doesn't exist. As an owner of a business, I'm sure you don't just stop what you are doing when you hit 40 hrs and go home. Sounds like she she would be better off being an hourly employee but I doubt this company would go for that.
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AgTDub
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In reply to Milwaukees Best Light • 4:43p, 1/6/25
AG
Agree
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AgTDub
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In reply to TXAG 05 • 5:51p, 1/6/25
AG
True, but for me I directly benefit from going "above and beyond". In former roles, I worked a crapload of OT as a salaried employee to get the job done but always knew that it would be accounted for when bonus time came around.

Not sure I would've been a content employee if I knew beforehand that there was no chance that my loyalty and dedication would not be rewarded in some way.
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TecRecAg
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9:11p, 1/6/25
AG
Everytime I read about people working at PA firms I wonder to myself why the F people work there.
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DallasAg 94
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In reply to AgTDub • 10:10p, 1/6/25

Congratulations.

My post probably came across more biting than it should have... many assumptions on my part. Your wife is Tax... mine is Audit, so, there is likely a difference there. In Audit... my wife works. Not hours, although Billable... there is no concept of increased pay (AFAIK) for FT when working more hours. In fact, many eat time to ensure their immeasurables are met and get a bonus... which I perceive as dumb. So, when they bid a project they end up building in eating time, which means they have to eat more time to meet their budget. When her boss was gone for 2 months, the work was absorbed.

Admittedly I know absolutely nothing about the Commercial Construction industry beyond my $6/hr Laborer role I held after HS graduation and the Roofing work I did to get through college.

CPA in Audit... my wife loves the work and the fulfillment it brings completing a "binder" and offering NFPs validation. I don't get it. I have strong opinions about the work and the industry.

She looked at Tax... we both looked at doing some side hustles in that aspect since it wouldn't conflict in a non-compete. We both came to the conclusion that we'd let those that enjoy Tax provide that.

Seriously... no intention to inflame or offend.
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DallasAg 94
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In reply to Allen Aggie • 10:54p, 1/6/25
I work in Tech and have since my 1st job out of college. The concept and idea of OT to me is foreign. I've been salary since 1995. I've had MBOs, KSOs, and Commission, but the pay was what it was. It includes much travel.

I would tell people I make great money, but the hourly rate sucked. In a sick macabre way, I get the idea of the CPA Audit slave.

My circumstance and life is completely unique, and we get that.

I get why Mrs DA 94 is the way she is.... we're wired similarly... and so, she gets me. Very few women are a fit for me. She is 1 in 3.5Billion.

Hope that helps.
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AgTDub
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In reply to DallasAg 94 • 8:30a, 1/7/25
AG
No worries man, there was a lot of info left out of my OP because I didn't feel it was relevant. Not your fault for assuming.

Part (most?) of my issue is just that she and I are of a different mindset. I went out on my own because I'm of a more entrepreneurial and independent mindset and don't like other people dictating to me what to do and when to do it. She, on the other hand, likes her work to be laid out for her and to just show up and do the job set out in front of her by her superiors.

It's the same way with our workout routines. I have a full home gym in my garage so I can "do my own thing" when I feel like it. She has been a very consistent crossfitter for 12-14 years because she "doesn't want to think about" what workout to do and likes the scheduled classes.

I guess though, when you choose that routine and direction, you also have to accept the drawbacks that come with it as well.

I just like my freedom and autonomy in all things too much and it frustrates me when I feel like people I care about are getting taken advantage of by others but at the end of the day "that's the path they chose".
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FightinTAC08
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9:39a, 1/7/25
AG
CPA here with 12+ years in public accounting (but now in industry). I don't miss public accounting at all.

The firm she is at is trying to cut costs and/or line the partners pockets more. doing away with bonus structure is unusual but I also understand why they are doing (I don't have to agree with it).

Public accounting is not a 40 hour max week job and those that ask for that cap are hit with the repercussions of that decision. everyone i know that has asked for 40 hour week or less has made it work but it has the pay cost and ladder climbing cost. The 40 hour cap will hold her there at the senior manager level which sounds like she wants, but also puts her at the top of the chopping block when they need to make real headcount cuts.

going to reiterate what was said above. unless you are paid hourly and get overtime rates, there is no "overtime" in public accounting. you have a salary you work to completion for your clients. some clients are ****ty and have massive budget overruns. some are better. all have budget overruns because partners sell the work for cheap and hope to add on more expensive services.

the hours she works are worth the salary or not. if she doesn't like the imputed rate/hr or the culture she needs to find a new job.
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AgTDub
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In reply to FightinTAC08 • 10:04a, 1/7/25
AG
Yeah, she's not looking to climb any higher for sure and I'm know she'd love to move to industry if the right fit were to arise. Public accounting is just all she knows so I think there is a little "fear of the unknown" there.

Can I ask, what is the typical salary range for someone in her position? Reason being, in other industries someone with 12+ years under their belt and holding a masters degree(2014) as well as a professional license(CPA since 2016) you typically see making 30-40% more than she is paid. For reference, she's at a good size(50-60 people I'd guess) public accounting firm in San Antonio.

Hell, in commercial construction a PM with a bachelors degree only and 5 years of experience makes 20-30% more than her as the "going rate". Plus a healthy (10-20%) yearly bonus as well.
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CoachRTM
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10:44a, 1/7/25
AG
You realize that she likely started her countdown to being fired by asking for 33% less hours at the same rate, right? Plus a maternity leave on the horizon. (Huge HR violation, but this company doesn't seem to care)

I admire your desire to value your employees and feel good about your ethics on your deathbed, but your wife's company (by your admission) doesn't care.

At the end of the year, her profit analysis is likely to be towards the bottom of her peers if they are putting in the extra billable hours and she isn't.
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AgTDub
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In reply to CoachRTM • 10:51a, 1/7/25
AG
She didn't ask for the same rate and didn't complain about the change. The irritation is all mine because I felt she was already underpaid to begin with. She is the one in the relationship with the "that's just the way it is" attitude, I'm the one with the "I can do better" attitude… character flaw of mine I suppose.
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FightinTAC08
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In reply to AgTDub • 11:50a, 1/7/25
AG
salary band is wide band and depends on lots of factors. I'm in DFW but I suspect most Texas markets should similar.

for 12 years public accounting experience at senior manager/director level I would expect salary + bonus to be at least 200k, probably closer to 225-250.

Big 4 managing director (non equity top level) is 200-250k base. probably closer to 300-325k total comp in year 1-2.

In Industry jobs, I'd expect high 100's low 200's base DOE. bonuses are all over the place, really depends on industry and employer. I have seen companies with 5-10% targets and some with 50% targets.

if going to industry to be a VP tax or a #2, could be 300k or more.

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FightinTAC08
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11:58a, 1/7/25
AG
regarding the fear of the unknown...i totally get it. I have worked on way too many clients where i was like no way could i work here and some where i could work there for the right money. then there were days i would tell myself i would work anywhere else than public accounting for any amount of money.

I'd say be diligent and deliberate if looking or taking an industry position because taking the wrong one would suck and then you are stuck playing the game again of finding a new job.

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AgTDub
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In reply to FightinTAC08 • 12:02p, 1/7/25
AG
Good to know, thanks. Your salary estimates are in line with what I believe they should be. Suffice it to say she's well below even your lowest estimates.
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Beckdiesel03
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In reply to AgTDub • 5:40p
AG
If you're ever need in part time admin/ project coordinator type positions, post here.-I am starting to look. And good luck to your wife and her situation. I chose my family and kids over my career and have zero regrets. But those nice salaries are also tempting.
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