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Confidential. For internal use only. This message is not intended for distribution outside McGladrey.

We want to bring you up to date on two things that we know are important to you: our year-end financial

results and the decisions we are making regarding your compensation.

It’s no secret that FY10 was a tough year - not just for us, but for our competitors and the marketplace as

a whole. However, there is important news that we should all feel good about.In spite of a very weak

economy, we held our own. We had several unique one-time charges that impacted our profitability

(see Rene’s financial update on The Point for more details). Without these, our pre-tax margin would have been essentially flat with last year. This is directly attributed to the efforts you put forth each and every day to provide exceptional client service, and we sincerely thank you.

What does this mean to you?

This year, as in previous years, we will continue to follow a “pay-for-performance” approach when it
comes to individual compensation. This means that base salary adjustments are directly tied to your
contributions and performance. Due to our financial results the compensation budget is limited this year,
but we’re pleased to share that we have planned for October 1 salary adjustments. We also
anticipate that more employees will see increases to their base salary than last year.

We kept the FY10 performance management process and related compensation decisions with our
former economic unit structure. These are the people who know you and are in the best position to
evaluate your contributions. You can expect to hear more about the timeline for compensation
communications from your regional and local leaders in the coming weeks.

Our future

We have a very bright future, and we’re taking steps to position our firms to grow more aggressively.
You’ve seen a number of exciting announcements in the last month, and let us assure you that the good
news is going to keep coming. Let’s take a look at our progress and plans for FY11:

In the 2009 People Survey, you told us that you want to hear more from us about how our business is
doing. This year we’ll be organizing quarterly webcasts to discuss our financial performance and progress
on key business strategies with you. The first will be held in early September after Q1 earnings are