Partner Equity Model

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Scenario
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Partnership equity · Personal model

Partner Equity & Earnings Projection

Model your profit allocation and the capital value you earn into partnership equity across eight years. Change net-margin growth, your end-of-year score and basis level for any year and watch both value streams respond.

Indicative only — not a forecast of pay
Modelling horizon
0 Year 0 · FY26 actuals Partial Year 0 New Starter

The whole projection is anchored to Year 0. To use this for a different partner, copy their figures straight off their partner statement for that year — the labels match. Everything below recalculates instantly.

Context

This year's allocation (£)

Equity position at year end

Point value auto-fills from valuation ÷ points. For a brand-new partner it's the only equity figure that isn't zero — this year's firm reference is ~£135,757. (The year-old sample sheets used ~£120,261, if you ever want to reproduce them.)

A

Scenario presets

Presets fill every forecast year — then fine-tune any cell in the ledger below.
Net-margin growth (all years)
Basis-level path
End-of-year score (all years)
 
B

Two value streams

Bars = total package each year · gold line = cumulative equity value earned in
Fixed Drawings
Basis Share
Equity Dividend
Equity earned in-year
Cumulative valuation share (right axis)
C

The ledger

Year 0 is your actual (set it in the Year 0 panel above). Edit the three input rows for each forecast year. Figures round to £1k.
D

Cash flow

When money actually lands — not when it's allocated.
Cash-flow assumptions — timing, payment split & tax

Payment windows — % of each year's award

Basis Share & Equity Dividend for a financial year are paid the following year: May & August clear that year's Basis Share, November & February the Equity Dividend. Fixed Drawings are paid evenly across their own financial year. Equity valuation share is excluded — it pays out over ~8 years after you leave.

After-tax reserving

The firm fixes the monthly drawing at a round figure (gross £16,667/mo, i.e. £200k/yr) and settles the actual tax separately — so this is a flat amount every month, not a per-year calculation. That's why the figure no longer drifts between years.

Profit distributions are reserved at a flat, conservative rate covering the additional rate, National Insurance and a buffer. 50% reproduces the actual net on your May window; nudge it to match your statement exactly.

Fixed Drawings
Basis Share windows
Equity Dividend windows

All amounts in £000s. Blue = a payment-window month. When shown after tax, Fixed Drawings use each year's effective income-tax rate; Basis Share & Equity Dividend are reserved at the flat distribution rate set above.

How this model works & where it's approximate

Every rule here is drawn from the Partnership Finance Handbook v2.6 and calibrated so that it reproduces your FY26 actuals and the firm's own sample scenario sheets. It is built to be directionally correct, matching the spirit of the firm's own projections — not to reproduce a payslip to the pound.

Fixed Drawings

£200,000 flat for every UK basis level (Policy 10), paid regardless of score or basis.

Basis Share — 22.5% of net profit

Allocated by weight = (basis/20) × [1 + (3 − score) × step], where step is the per-point score adjustment from Handbook Table 3 (27.5% at basis 20, tapering to ~15% at basis 100). The per-unit value grows with firm profit relative to firm growth; calibrated as roughly flat at +10% net-margin growth and about +8%/yr at +17.5%. This row reproduces the sample scenario sheets to within ~0.3%.

Equity Dividend — 77.5% of net profit

You accumulate equity points each year (new points = (basis/20) × score-factor × scale, using Table 2's 200/150/100/60/25% score bands). Your dividend is points × point-value × 0.775⁄6. Point value grows as net margin outpaces the ~5% annual point issuance. The scale is fixed so the model reproduces your actual 0.27 points earned in FY26.

Valuation share & the valuation gap

Your equity valuation is points × point-value (equivalently ≈ 7.74 × Equity Dividend, since notional value = 6 × net profit). On top sits your share of the valuation gap — your claim on former partners' points. The Handbook itself flags the gap as "particularly imprecise", so it is modelled as a declining fraction (~0.68 → 0.46) of each year's points-value increase, calibrated to your FY26 gap of £21.5k and the sample sheets. Treat the cumulative valuation number as a sense of scale, not a promise. It only vests after three years' service, and is paid out over ~7–8 years after you leave.

Calibration checks

  • Reproduces the firm's own FY27 profit-allocation forecast (£354k / £363k / £383k at +5/+10/+15%) to within ~0.6% at +5% and +10%.
  • Reproduces the sample "20 basis-point" scenario sheet's Basis Share, Equity Dividend and cumulative valuation to within ~1%.
  • Higher net-margin cases (≥+15%) sit a few percent below the firm's sheets, which appear to build on a higher starting valuation — so read strong-growth years as conservative.
Not advice, not a promise of pay. Distributions depend on firm cash flow and Finance & Audit Committee approval. Special joining arrangements and any part-time adjustment are not reflected — apply those yourself. This is a private planning aid, not an official firm document.