The recently-released AASHTO changes suggested there would be a National Compensation Matrix that architectural and engineering firms could use to determine reasonable compensation. The Matrix has just been released and if you haven't yet had time to review it, you should. You can get the Matrix here.
We have always used the ERI data to determine reasonable compensation and we were very skeptical about the proposed new methodology. However, in reviewing the results, they are for the most part very similar to ERI and, in some cases, considerably more.
Since many firms have already filed their incurred cost rates for 2011, the question remains open on whether you can 'restate' the incurred costs for the new National Compensation Matrix and whether these results should be adjusted for where the executive is located.
Some key items to keep in mind:
- It is not mandatory that a firm use this Matrix. Firms may still choose to perform their own analysis.
- Superior performance is not considered. The Matrix is just one data point and firms may choose to argue for superior performance (if so, make sure you know the repercussions).
- The numbers are 'national averages' taken from a number of different surveys.
- There is no consensus on how to allocate unallowable compensation between direct and indirect salary.
- The Matrix is for calendar year 2011. If you have a fiscal year end, these numbers will need to be adjusted.
- They expect to have the numbers for 2012 issued by February 2013.
Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.