Newmark Knight Frank brokers are being forced to contribute up to 10 percent of their commissions into stock in BGC Partners, the company that acquired the brokerage for $63 million in October, the New York Observer reported, causing some brokers to take pause. While so far no executives at Newmark have defected to other companies, managers from rival brokerages are watching closely to see what reception the shift will get, the Observer said.
“No broker wants to be told what he has to do with his share of the money,” said one broker, from a rival firm.
The commission-conversion program will make many Newmark brokers BGC equity holders, a structure that some firms have used to team build.
“BGC has produced 94 percent returns on equity and ten percent dividends,” said Barry Gosin, Newmark’s CEO. “This creates an opportunity for people here to build equity and their wealth.”
Mark Weiss, a top producing broker at Newmark, said he sees it as an opportunity.
“My personal view is that it’s a wonderful deal and I’m genuinely excited about it,” he said. “My personal interests are completely tied into my firm’s. It’s enormously gratifying to know that both myself and my colleagues are going to be rolling in the same direction as my firm. And that cuts both ways. The firm now has even more of a vested interest in my success.” [NYO]