McKinsey is overhauling how it pays its partners, shifting a larger portion of their compensation from cash to equity in a restructure internally known as Project Acorn, according to the Financial Times. The move aims to strengthen the firm's capital, simplify a complex multi-year payout system, and prepare partners for a consulting business that is moving away from hourly billing.
Why McKinsey is changing partner pay
The trigger is straightforward. Clients are increasingly linking consulting fees to actual savings or performance improvements they can demonstrate, meaning McKinsey often does not receive full payment for years and earns less if agreed targets are missed. Artificial intelligence is accelerating this trend, with firms across the industry now under pressure to prove that their advice delivers tangible results for clients.
What Project Acorn changes for McKinsey partners
According to the FT, the proportion of a partner's "additional award"—their share of annual profits, which can reach millions of dollars for senior partners—diverted into equity could increase by roughly 3 to 5 percentage points. A partner who previously took home about 95% of that award in cash might now receive 90%, with the remainder locked into equity. The exact figure will vary year to year depending on the firm's capital needs.
The plan took over two years to finalize after intense internal debate. An earlier draft, called Project Oak, would have required more capital from the most senior partners. Project Acorn caps how much of their pay can be diverted into equity and accelerates some payouts for younger partners who would otherwise have waited years to receive them. The new system replaces a multi-year payout structure that many partners had come to see as cumbersome.
Why AI is forcing the consulting industry to rewrite its playbook
The AI question runs through all of this. The technology is performing the kind of routine work that junior consultants used to bill by the hour, and clients have noticed. McKinsey CEO Bob Sternfels has stated that the firm now has 60,000 employees—25,000 of them AI agents. The new structure also gives management more flexibility to invest in technology, and McKinsey, which has historically preferred alliances with AI companies over building its own tools, may now reconsider that approach.
McKinsey told the FT that it does not discuss partner compensation publicly but "continues to evolve" how it attracts and retains talent.
