Wade P. Johnston is a 22-year-old Michigan State graduate who, according to his Conway MacKenzie bio page, is in the process of earning his Level II certification as a Chartered Financial Analyst. According to Investopedia, Level II "deals mainly with asset valuation." Test takers have a 42% pass rate on the certification exam offered twice annually, in June and December.
Johnston may have a leg-up on the CFA exam thanks to some real world experience as a restructuring consultant working on Detroit's bankruptcy.
Detroit News: Wade P. Johnston got his bachelor’s degree in finance in 2012 from Michigan State University and is part of the team the consultants, Conway MacKenzie, have working to turn around city operations. The Birmingham firm billed the city $288,671 for the work of 11 staffers over two weeks in July, including more than $26,000 for Johnston alone.
The records give a rare look at the costs being picked up by the city and state, a breakdown city council members and other critics have argued has been hidden amid Detroit’s historic bankruptcy. Conway MacKenzie’s hourly rates range from $495 for the group’s senior managing director to $275 for Johnston, who started with the company in June as a senior associate, according to records.
The city is actually getting a bargain here because Conway MacKenzie is offering their services at a discounted rate.
Still, Detroit is paying $1.4 million every month to pay for its bankruptcy process. The consulting fees are a source of consternation for union leaders and emergency management critics, but they are apparently within the normal range for such services.
Detroit News: Jim McTevia of McTevia & Associates, a turnaround firm in Bingham Farms, said $275 an hour for an entry-level staffer is reasonable given Johnston is part of a larger “machine,” although it may be on the high side. Tevia said his hourly rate for beginning staffers is about $225 an hour.
“The reality is this is a complicated and challenging restructuring,” said Scott Eisenberg, a managing partner with Amherst Partners, another turnaround firm in Birmingham. “If they bring better results, they will pay for themselves.”
Two things here.
1. It's interesting that financial consultants would argue compensation for financial consultants is fair. Totally crazy, right?
2. Considering financial analysts also once thought it was a good idea to buy Detroit's "deficit elimination" bonds, maybe financial analysts are like closers in baseball. They aren't being specifically overpaid by Detroit's bankruptcy process, so much as their skill set may be overvalued by an irrational market.
