Keller Williams’ lifetime profit sharing program, which has distributed more than $1 billion in revenue since 1997, is under fire.
A “small group” of the firm’s “top profit share earners, market center owners and regions” proposed major changes to the program at a meeting in Austin last week, Inman reported.
“On an annual basis, multiple proposals are brought forth to a vote at one of two annual IALC meetings,” CEO Gary Keller told Inman. “If our profit share system is to change, our agents will decide. No changes to the system will be made without the approval of our associates.”
Under the current system, agents who have been at the firm for at least three years are entitled to a cut of their former market center’s profit for life, even if they move to a competing brokerage. The program has been described as a “cornerstone” of the firm’s culture.
The issue of profit sharing with competitors has come up in the past. Last July, Keller challenged all former KW agents now with competitor eXp Realty to return the shared profits they had received. The firm has seen some high-profile defections to eXp in recent months.
“I can’t tell you how many times I was in a room with [Keller] when he said we would never do anything like this because it would totally break the integrity of profit share and the commitment they made,” Kevin Kauffman, one former KW agent now at eXp, told Inman.
Keller Williams has faced pressure to become more profitable, and changes to the profit sharing model could be one way to achieve that goal.
“Those [votes] always seem to go the way the company wants them to go somehow,” Kauffman said.