Agency Owner’s, Question?

Oct 10, 2008

  1. Apex0177
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    Apex0177 New Member

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    I’m in the process of negotiating my compensation package for 2009 and I don’t think my agency’s first proposal is very fair. I’m looking to see what other agency owners out there think would be a FAIR compensation package?

    Additional Info:

    - I work out of my house
    - The agency covers travel expenses they have been running between $12,000 and $14,000 per year
    - They provide benefits, Life Health, DI and I’m in an ESOP plan.
    - They don’t cover any utilities, internet, office furniture, ect.
    - I have support staff that does my marketing and apps.
    - I write all of my business in the trucking industry

    My current book of business is $1,500,000 in premium and $220,000 in agency revenue.

    Please let me know what you think would be a FAIR comp package. Thank You
     
    Apex0177, Oct 10, 2008
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  2. saieddie
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    saieddie Guru

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    $10/hr and all the spam you can eat.
     
    saieddie, Oct 10, 2008
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  3. Apex0177
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    Apex0177 New Member

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    Since I’m in sales I’m working 24 hours a day 7 days a week so that’s what 8,760 hours @ $10 per hour $87,600 per year. Since I’m writing about $125,000 in new business each year and I don’t like spam, I’m going to have to pass.

    Any real advice out there?
     
    Apex0177, Oct 13, 2008
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  4. The Rabbi
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    The Rabbi Guru

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    Good advice is always difficult to find. I'll try.

    You say their offer isn't fair so counter-offer with what you think is fair and negotiate. You better have some good evidence to prove your offer.
     
  5. Apex0177
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    Apex0177 New Member

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    I came from the stock broker world where got 40-50% of revenue generated depending on the size of your book and had plenty of support. I thought that was fair. With the offer I currently have 30% on new business and 20% on renewal, I can’t help but think A) this isn’t very fair. I’m giving up an additional 10% on renewals and with audits and so forth I’m spending more time on renewals than new business. B) Why not just go independent?
     
    Apex0177, Oct 14, 2008
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  6. saieddie
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    saieddie Guru

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    If the only thing you have to pay for is the stuff in your house - 50% new business, 40% renewal seems to be the going rate. If you work 365/24hrs a day, they should also pay for your cocaine.
     
    saieddie, Oct 14, 2008
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  7. Deep South Broker
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    Deep South Broker New Member

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    You seem to be a very valuable employee. I think you are in the driver's seat, much like a client who has been hit by an at fault, insured driver.

    I presently pay people in your posistion a salary based on what you do. For example, if you do all the work, ie filing, renewal processing, etc and bear the sales expense as well, I would pay what ever you wanted in a draw salary and split the agency profits at the 50% level.

    For example, I would pay you $ 10.00 and hour for a 40 hour work week, if you wanted to make say $ 1250.00 a week, I would call $ 400.00 a week salary and $ 850.00 a week draw. $ 400.00 for teh clerical and a direct expense, $ 850.00 would go against your share of the agency profit.

    for example $ 220,000 revenue, $ 26,400 a month, expenses would run around 10 to 15 a month leaving 11,400 profit you would draw around $ 2500.00 leaving you a net monthly bonus/profit in the 2700.00 a month.

    We would pay your rent and otehr expenses out of teh reneue. With a book like this you would be a very valuable assett and we would work out a package that would carry you into retirement and or disablity. Instead of insruance, I would rather see you on a permanent renewal compensation that would exisist as long as your business was renewing.
     
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