One of the biggest consulting businesses in the world, McKinsey & Company employs approximately 30,000 people worldwide. Dominic Barton was succeeded by Kevin Sneader as McKinsey’s CEO in July 2018. Sneader’s total remuneration for 2019 was $15.6 million, according to the company’s 2020 annual report; this includes a $8 million equity award, a $6.3 million cash bonus, and a $1.3 million basic salary.
It’s significant to notice that the CEO’s compensation does not reflect the typical consultant wage at McKinsey. The average base wage for entry-level consultants at McKinsey is $87,000 annually, with additional options for performance-based bonuses and profit-sharing. The level of experience and specialization area, however, affect earnings.
Establishing your consultation rate is the first step if you’re thinking about beginning your own consulting business. This can be accomplished by investigating market rates for comparable consulting services in your sector and area. Incorporating your degree of knowledge, skill, and the value you provide to your clientele is also important.
You must take into account the expenses related to launching and maintaining your business after determining your consultation rate. These could consist of things like office furniture, tools, marketing and advertising, insurance, court costs, and taxes. To make sure you’re working within your means, it’s crucial to develop a thorough business plan that details your anticipated expenses and revenue.
Since consultants are often categorized as self-employed people, they must declare their consulting income to the IRS. A Schedule C form should be submitted along with your personal tax return to do this. In order to avoid fines and interest costs, you might also need to pay estimated taxes throughout the year.
Self-employment taxes, including those for Social Security and Medicare, are due by consultants. Depending on where your business is located, you could also need to pay state and local taxes. Working with a tax expert will help you make sure you are adhering to all rules and regulations regarding taxes.
In conclusion, the CEO of McKinsey earns a considerable sum of money, but this is not comparable to what the firm’s typical consultant makes. Establishing your consultation rate, taking your expenses into account, and adhering to all tax laws and regulations are crucial if you’re interested in starting your own consulting business.
The article makes no mention of whether or whether consultants pay less in taxes. It only concentrates on the pay of McKinsey’s CEO.