Professional Documents
Culture Documents
2001 Zehnder A Simpler Way To Pay
2001 Zehnder A Simpler Way To Pay
Aby EgonSimpler
Zehnder
Way to Pay
From the Magazine (April 2001)
Leer en español
There have been many changes in professional services since the
day I first set up shop in 1964—not the least of which has been a
pronounced shift in the way professionals pay themselves. When I
started, compensation was strongly tied to seniority. After all,
seniority was a proxy for experience. Today, most consulting
firms, law firms, and so forth consider seniority irrelevant—and
occasionally something much worse. They believe pay should be
based on performance and, more specifically, individual
performance. That’s why at most professional firms, people are
paid according to the size of their client billings and how good
they are at bringing in new clients. Indeed, firms invest
considerable time and effort to measure those results precisely.
Seniority Rules
EZI’s seniority-based system is as easy to administer as it is to
understand. For partners, compensation comes in three ways:
salary, equity stake in EZI, and profit shares. There is some
variation among partner salaries across countries because of
variations in the cost of living; people don’t expect to be paid the
same base salary in Kuala Lumpur, say, that they would be paid in
New York. But the distribution of equity and profits among the
partners is consistent across the whole firm.
A Fairer Way
The seniority rule for partner compensation has been in place
ever since I founded EZI. From the start, I paid my first associate,
Walter Siegenthaler, more than I paid my second associate, Hans
Schaer, because I felt that Walter deserved more—to reflect the
extra time and effort he had put into building the Egon Zehnder
brand. That continued as the firm expanded and opened offices in
Belgium, France, Britain, and so on.
No Ordinary Interview
AReview.
version of this article appeared in the April 2001 issue of Harvard Business
EZ
Egon Zehnder is the founder and former
chairman of Egon Zehnder International, an
executive search firm with 57 offices and more
than 300 management consultants worldwide.
AUDIO
The Subtle Art of Disagreeing with Your Boss