A closer look at the structures, risks, and rewards shaping leadership in today’s AEC industry.
The role of principals and partners in the AEC world is both pivotal and complex. These are the individuals tasked with setting direction, managing risk, and shaping culture – all while ensuring profitability and long-term stability. Still, how these responsibilities translate into governance structure, compensation, and benefits is often less clear. Zweig Group’s 2025 Principals, Partners, and Owners Report shines a light on these complexities, offering a detailed view of how firm leaders are compensated, how decisions are made, and what benefits come with the corner office – or, in some cases, the jobsite trailer.
Let’s take a closer look at a small section of the 2025 Principals, Partners, and Owners Report, which provides a detailed snapshot of how AEC firms structure leadership roles, manage risk, and reward people at the top.
Within the AEC industry, leadership is increasingly shaped by formal governance structures. Nearly three-quarters of AEC firms report having a board of directors, though adoption is strongly tied to firm age and size. For example, older, larger firms are far more likely to have boards than those founded in the last decade. Executive committees, which are present in a solid majority of firms, typically handle day-to-day operations, policies, and compensation decisions while boards retain oversight of ownership matters and major strategic initiatives such as mergers and acquisitions. More than 90 percent of principals reported participating in firm-wide planning, showing that governance trends indicate a steady move toward more structured decision-making processes, particularly in mid- to large-sized firms.
Leadership in an AEC firm comes with both authority and exposure. Less than 40 percent of principals are bound by non-compete agreements, reflecting a reliance on professional loyalty rather than legal restrictions to retain talent. At the same time, just over 30 percent of principals personally guarantee firm debt, a risk concentrated in smaller organizations where access to capital often depends on individual backing. Oversight of principals is mixed. Just under half of principals report undergoing formal performance appraisals, with non-owners more likely to face evaluation than majority stakeholders. Meanwhile, just over half of firms establish eligibility requirements for advancement to principal. In these cases, advancement is most commonly tied to business development skills, staff management, or licensure. These trends are indicative of the uneven terrain when it comes to the balance between authority, accountability, and personal risk in firm leadership.
Compensation for firm leaders is also multi-layered, blending stability with performance-driven rewards. Base salaries remain the foundation, with the median salary experiencing steady growth since 2020 after a brief plateau. Beyond salary, just under 70 percent of firms distributed bonuses last year to reflect individual and firm-wide success. Another dimension comes from shareholder distributions, which were issued by more than 60 percent of firms. These trends reveal a structure where leaders are rewarded not only for their roles, but also for the performance and profitability of their firms. The combination of salary, bonuses, and distributions demonstrates how closely leadership pay is tied to both firm outcomes and ownership structure.
Beyond salaries, bonuses, and distributions, firm leaders receive a range of benefits that emphasize practicality and accessibility. A majority of firm leaders receive company-paid cell phones or mobile devices. This underscores the expectation of constant connectivity. Another common benefit is transportation support, with just under a quarter of firm leaders receiving auto allowances. Networking remains a common part of the package as well, with some firms providing club memberships to support client engagement. Most notably, perhaps, is how common it is for firms to prepare personal taxes for principals. Just under half of firms report providing this benefit to save both time and potential headaches. These perks and benefits reflect a focus on efficiency and professional presence rather than extravagance.
Retirement benefits for firm leaders continue to evolve. Traditional pension plans, once a staple, are not uncommon compared to things like the 401(k) plan. This reflects a broader shift across the industry from defined benefit plans to defined contribution plans. This in turn places a greater responsibility on the individual to manage their long-term savings. For principals and partners, retirement security is increasingly tied to both personal contributions and firm performance rather than guaranteed payouts.
When taken together, these trends paint a picture of AEC leadership that is both demanding and rewarding. Governance structures are becoming more formal, particularly in mid- to large- sized firms. Compensation packages are diverse, balancing salary with bonuses and ownership distributions that reflect firm performance. Perks are designed to support connectivity, mobility, and efficiency, while retirement planning is aligned with modern contribution models. Principals and partners carry real responsibility – and often personal risk – but also share directly with the success of the firm.
Understanding these trends is critical for current and aspiring firm leaders. Benchmarking against peers provides valuable context for decisions about governance, compensation, and benefits. Zweig Group’s 2025 Principals, Partners, and Owners Report offers the most comprehensive data available on these topics, equipping leaders with the insights they need to strengthen their organizations and plan for the future. From salaries to shareholder distributions, from voting rights to retirement plans, this report is the definitive resource for AEC firm leadership. See the full report here!
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Kyle Ahern is manager of Data and Analytics at Zweig Group. Contact him at kahern@zweiggroup.com. |
