An Insider’s Look at the Big 4 Ranking, Compensation and Hierarchy (Part One)

Posted by in Accounting, Auditing & Tax


Authors Note: This post is purely based on personal experience with PricewaterhouseCoopers. Though it is likely that this system is used at the other Big 4 accounting firms, this my not necessarily be the case at Deloitte, Ernst & Young and KPMG. The Big 4 employ an “up or out” mentality, meaning that staff are either promoted each year or asked to leave the firm. While this is something you are not likely to come across in your recruiting experience, this is generally good news for employees. If you take your career seriously and work hard, there is a very good chance that your roles and responsibilities (and pay) will grow with each year of Big 4 accounting. This is a major benefit of the Big 4 as opposed to, say, a staff accounting position in industry. PricewaterhouseCoopers uses a 4 tiered rating system to rank and compare each “class” of staff. When you come into the firm you are filed into a “class” with those who start at around the same time as you. Much like school, you and your class will progress through the firms ranks at roughly the same pace. Before we discuss this further, here is a brief refresher on the firm hierarchy. For those of you interviewing for an experienced position, this will help you determine which level you will come in at. Intern - Typically a college student who has just completed their junior year or, in the case of Masters candidates, just completed their senior year of college. First year Associate - This is the rank that college grads come into the firm as. Known as “new hires” for the first few months or so, and then “first years” for the remainder of the year. This level is targeted most heavily by the firms’ campus recruiting program. How much do Big 4 associates make? These positions typically have a very competitive starting salary. Check out THIS POST for specific info on salaries and compensation: Experienced Associate - After your first year, or in some cases after your first busy season, you will become an “experienced associate.” This is not technically a promotion, but rather an indicator of rank. Many offices have an annual promotion day. On this day, every staff member who is eligible for a promotion or a move up in the ranks is officially given their new title. It is common to spend two years as an Experienced Associate before moving on to the Senior level. Senior Associate - After spending two years at the Experienced Associate level staff are likely to be promoted to Senior Associate. This is the first change in rank that is considered an actual “promotion.” Accordingly, candidates are expected to meet predetermined criteria and performance metrics to achieve the promotion. The ranking system, which I will discuss below, comes into play here. It should be noted that some staff are promoted to Senior after only one year at the Experienced level. This is uncommon but, due to the specific office/ team needs or in the case of exceptional performance, it does happen. Seniors are responsible for running audit engagements on the front lines. It is widely considered that seniors bare the toughest work load due to the fact that they are responsible for performing the most difficult front line audit work and reviewing nearly all of the work done by first-years and experienced associates. This is the level at which many staff leave for the sparkling positions open to them in industry with a Big 4 resume. Manager - After working as a Senior Associate for two - three years, the next promotion is Manager. (Note: Some make the designation of “Second Year Senior” or “Experienced Senior” prior to Manager). At this point, Managers will have had roughly five to six years with the firm. There is a major increase in salary at this point. At this level it is likely that managers will begin to seriously consider the “Partner track.” Managers are not in the field nearly as much as seniors and, as the name implies, take on a far greater managerial role. Senior Manager - Senior managers are really Partners in training. By this point Big 4 public accounting has become a career. While many view the Big 4 as a launching pad for their career, Senior Managers view the Big 4 as a career in itself. Because Senior Managers are able to leave the firm and hand pick their dream job in industry, the compensation at this level is extraordinary. Partner - This is the highest level attainable in Big 4 accounting firms. Partners have a vested interest in the firm and buy into the partnership. What is the life of a partner like? A salary of at least $Million, a reputation as a trusted member of the elite business community and a American Express Black card, and much more. You are the best of the best. Stay tuned. In the next post we will examine the ranking system used by the Big 4 firms. To learn the Secret to getting hired with the Big 4, please visit: http://www.big4guru.com
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  • Melissa K
    Melissa K
    It seems that there is quite a bit of debate about the entry level salary for a first year partner. I think that, from the comments, it's safe to say that your mileage may vary, depending on the job. Although by the time one reaches partner, they ought to have a sizable investment portfolio.
  • Melissa Kennedy
    Melissa Kennedy
    Thanks for all of the great comments.
  • Tamber
    Tamber
    Excellent!
  • Jacey
    Jacey
    Good point. I hadn't thought about it quite that way.
  • BigNOguru
    BigNOguru
    big4guru, what are you talking about!! The entry level partner salary for first year partners in the US is no more than $250k-$300k... who ever told you it was $1Million, you're funny buddy!
  • torrent d.
    torrent d.
    It was hilarious to say that partners make at least a million US$.
  • Tyler
    Tyler
    It is ridiculous to say that partners make at least $1 million. The average partner compensation in the IPA 100 is approx. $460,000. Entry level partners may make significantly less and older partners may make significantly more, but an Amex Black and $1 million a year aren't likely (even at $1 million a year and Amex Black probably isn't happening).
  • Ex PwC
    Ex PwC
    It is total nonsense that Big4 partner earn at least a million US$. Starting salary for a partner in Europe could be, say, EUR200k

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