The Group Inc.'s
Stock Ownership Plan
In 1976, 12 successful Realtors founded The Group, Inc. with the idea of building an “equally owned” shareholder company; more than 23 years after our first office opening, The Group, Inc. continues to be the real estate leader in Northern Colorado with 175 sales partners in our five offices in Fort Collins, Greeley and Loveland. Our shared ownership concept, a commitment to our company’s goals, value-added services for sales associates and consumers, and sophisticated prospecting efforts gave our firm a 1998 sales volume that exceeded $670 million, with an average of 43 closed transactions per “sales partner”.
We believe that our equal-ownership structure and a strong focus on core beliefs are the primary reasons for our continued high market share and long-term productivity. Integral to our culture, the ownership structure encourages sales partners to work as a team. And through this teamwork, mutual support, persistence, and a commitment to a shared vision, our company has been able to attract and retain the true leaders in our real estate market. For example, our management team averages 18 years with the company, and our sales partners have an average of 17 years ion the real estate business, with more than 12 years at The Group, Inc.
How Equal Ownership Works: Basically, our company distributes ownership of the firm in equal shares to its sales associates, or “sales partners”, all of whom are independent contractors, as well as several staff employees and management. Each shareholder can own up to 5,500 shares, and incoming sales associates are required to purchase stock in 500 share increments. Sales associates who do not own all of their stock are required to sign a stock subscription agreement and begin a stock purchase program of at least $100 per closing until they own the total amount allowed (5,500).
Oversight and direction of the “shareholder” approach rests in the hands of two groups – a management team and a board of directors. Each year in November, the management team meets to set the next year’s goals and budget and recommends a “fair share” which each sales partner must contribute to reach the financial goals. The team bases the annual budget on actual costs for the full range of services needed – and expected – by our sales partners. Our partners appreciate that the budget includes everything they need to sell real estate, including adequate support systems and administrative help. In addition, the budget allots a certain amount for profit and capitol investments. We own our five real estate offices. This year’s fair share is $31,600 per sales partner.
Each December, sales partners meet with their managing broker to decide how their fair share will be paid. Most sales partners opt for a 50/50 split of their commission until their fair share is paid in full. Starting in January each commission disbursement is split according to the split determined by the partner and the manager until the pre-determined fair share amount is paid in full. Once sales partners have paid their fair share as owners in the company, then they receive 100 percent of their commissions.
Besides the management team, The Group, Inc. has a 7 member (Sales Partner) board of directors that develops a long-term vision, establishes and reviews the company’s business and marketing plan, reviews the management team’s activities, and makes recommendations to shareholders at semi annual shareholder’s meetings.
Other parameters of our equal-ownership concept include: Besides fair share and bonus contributions, in 1990 The Group, Inc. shareholders decided to pay the company a 3 percent ownership fee off the top of any commission. Partners vote on the distribution of these ownership reserves at the December shareholder’s meeting. For example, reserves may be distributed in equal amounts to each licensee with the company for the last 12 month period of time, may remain as a pert of the company’s reserves, or may be used for additional support services that are not already covered by the sales partner’s fair share amount. Any bonuses received by a shareholder not owning all of their shares will go directly to the purchase of any outstanding shares.
For the last five years, shareholders decided to make contributions exceeding $125,000 from the collected ownership fees to “GroupSmart” program, which is co-sponsored by The Group, Inc. and the athletic department at Colorado State University. This community outreach program supports athletes from the university in their efforts to help children in kindergarten through high school in such activities as reading programs in the Fort Collins and Northern Colorado areas.
As mentioned before, sales partner’s longevity is high because fair share contributions are used for a wide variety of support services. In addition, our sales partners are supported by full time non-selling broker managers, a business manager, a relocation director, a marketing department, an administrative staff of 8 receptionists, 11 assistants, 8 under contract through closing escrow officers, and 3 couriers.
With this level of support, sales partners are free to list and sell and actively prospect. As proof of the fair share concept’s success, in 1998 the average gross commission dollar was $215,000 for our sales partners. Plus, in 1998 our sales partners were involved in the sales of over 70 percent of all residential real estate sold in our local MLS market.
Another benefit resulting from the fair shares paid by sales partners is the weekly home tabloid (The Real Estate Source) produced by our marketing department and distributed as an insert in our local weekend papers with a circulation of approximately 49,000. In addition, our company mails a monthly newsletter to more than 22,000 buyers and sellers in our network.
More than 23 years’ experience with our unique ownership concept has proven that it attracts and keeps top-producing sales partners by offering them a “piece of the rock”. IN addition, our corporate structure has helped to harmonize individual goals with organizational goals so that the whole is indeed greater than the sum of its parts. As a result, The Group, Inc. benefits economically from stable, long term relationships, which enables our firm to provide the support systems our sales partners need to remain at the top of their game.
Sharianne Daily, CRB, is the President/CEO of The Group, Inc. She can be reached at 970-229-0700 or by email at: sdaily@fortcollinsrealestate.com |
|
