Brenda Potwater was quite proud of herself. She was going to be a principal in Hitesh, Springwald, and Fruttison, the oldest old-line planning and design firm in the San Francisco Bay area. She was already dreaming of the weeks-long spelunking vacations in Central America that she and her boyfriend of seven and a half years, Luke Bastionsen, were going to be able to take now. And that cute little 900-square-foot bungalow in Ross she had her eye on for the last couple months could actually be within the realm of possibility now that the sellers dropped the price to only $1.2 million with the additional income she’d surely be making. Wow— it was really exciting! At 39, she was the youngest principal ever to join the ranks of Hitesh, Springwald, and Fruttison, and the only woman who ever broke through the proverbial “glass ceiling” there. Then the reality hit. She had a meeting with Srinikan Hitesh, the managing partner, who filled her in on the privileges and responsibilities associated with becoming a principal at Hitesh, Springwald, and Fruttison. It was a mixed bag of good and bad as far as Potwater was concerned. Yes— she would earn more than she had as a senior associate. But all of that additional income (and then some) was going to flow right back into the firm in the form of her stock payment of $2,300 a month. And that payment was going to have to be made for the next 15 years. “My gosh,” Potwater thought to herself, “I’ll be 54 before this stock is paid off!” Then she got some more bad news. She would also have to sign personally as a guarantor of the firm’s line of credit. And, because the firm did a horrible job with billing and collection, it owed over $8 million! Topping it off, she later learned Hitesh, as the chairman as well as managing partner, was paying himself almost $600K per year, when the company barely made an accrual profit and was looking at the first backlog decrease in a half-dozen or more years.After all was said and done, Brenda Potwater signed on the line and got her name on the big wall behind the receptionist station. She and her beau are still waiting to take that Central American vacation though she did end up buying the bungalow in Ross after securing a jumbo, no principal payment adjustable rate mortgage. After her pay increase and stock payments, nothing has really changed in her day-to-day financial picture, though she is building up a significant value in her stock account. The firm is now buying Hitesh’s stock back— no fun— but at least he’s no longer on the payroll. Brenda Potwater is now older and wiser, and she has a lot more gray hair to show for it!Originally published 4/7/2008
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