McKinsey defers partners’ bonuses as dealmaking dries up
Partners at management consultancy McKinsey have reportedly voted to defer part of their bonuses as the company sees a slowdown in demand for its services amid a slump in corporate deals.
Top-level employees decided to waive part of their annual share in the company’s profit as the firm’s clients reduce spending, The Sunday Times reported.
McKinsey’s pay decisions are taken globally, but countries may adopt different models on other bonuses, meaning the impact could differ between offices.
Senior consultants often get a portion of the firm’s profits at the end of the year on top of their salary and performance-based bonuses, so that partners’ pay can be easily adjusted based on the company’s fortune. The profit entitlement is based on how well the firm performs and partners’ seniority.
The news comes after McKinsey, which has some 46,000 employees and 3,000 partners globally, announced that it would cut how many staff were promoted to partners in 2024 in an effort to save money.
Partners at other consultancy firms, including Bain, are also reported to be considering similar steps after the City struggled with a dearth of corporate dealmaking this year.
Barclays is said to have delayed its decisions on bonuses to give employees more time to complete deals.
Meanwhile, Goldman Sachs is reportedly looking at raising bonuses in its trading business despite revenues falling.
McKinsey declined to comment.
City PM approached Bain, Goldman Sachs and Barclays for comment.