The economic downturn has had an impact on distributions to owners and partners, as reported in the 2011 BV Firm Economics and Best Practices Guide, available later this month. Perhaps nowhere else is the evidence of the downturn reflected as strongly as in the two tables below. The increasing presence of low-quality competitors, web sites that purport to value businesses, and other marketplace threats has also contributed to the harsh fact that just more than a quarter of all firms in the business valuation profession increased partner compensation in 2010.
And, one in four reported lower earnings.
The highest increase in partner earnings reported was 50%; the largest reduction was 32%. The mean change in partner distributions for all firms that answered this question in the Survey was +4.4%. (Nearly 500 firms providing business valuation services answered this year, making this the largest survey of the profession.)
Compared to ’09, were 2010 distributions: |
2010 |
2008 |
Higher |
25.5% |
57.9% |
The same |
49.9% |
38.4% |
Lower |
24.6% |
3.7% |
The news regarding equity distributions in ’10 hasn’t discouraged firm leaders. Over half anticipate a better year this year, and less than one in twenty anticipates a reduction, as shown below. Let’s hope so!
Compared to ’10, will estimated 2011 distributions be: |
|
Higher |
51.5% |
The same |
44.1% |
Lower |
4.4% |