Performance-Based Compensation: How an Oral History Can Inform Our Understanding of Accounting Partnership Income Allocation Models

Abstract:     
This research explores how an oral history can inform our understanding of accounting partnership income allocation models. Forty oral history interviews of CPA firm partners indicated a widespread impact from unclear and instable role definitions in performance-based compensation arrangements. The oral history interviews suggested partnerships adopted performance-based compensation systems without consideration of the extent to which the success of such systems depended on stable role specificity. This research has implications for corporations where the interests of the entity may be best served when top management undertake diverse or previously unspecified roles and activities, on an ad-hoc or opportunistic basis.

Keywords: New Zealand, Big 8, Big 4, accounting, income allocation, oral history, role definition, performance-based compensation

JEL Classifications: M40, M50

Working Paper Series