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REIQ Journal : July 2008
INDUSTRY PRACTICE 21 Jason Roach, National Head of Real Estate, Macquarie Relationship Banking While commissions motivate staff to perform, offering an equity stake may be an alternative way to lock key talent into your business. Equity stakes lock in key staff While commissions motivate staff to perform, offering an equity stake may be an alternative way to lock key talent into your business. This is something that should be planned well in advance as part of your business planning process. Indeed, succession planning must be the primary objective of offering an equity stake. Both the principal and staff member need to have a clear understanding and be happy with the decision; and both should be doing it for the same reasons. While there is no hard or fast rule, equity offerings can range from 5 to 50 per cent, depending on how many people are involved and at what stage the business lifecycle is at. In conclusion, it’s not right to think of commissions as a necessary evil where you give away your revenue. When commissions are right they can increase your revenue through motivating sales staff. Profit-sharing schemes linked to performance have been de rigueur in the corporate world for decades. Disclaimer The information contained in this article is of a general nature only and does not constitute financial product advice. Nothing in this article shall be construed as a solicitation to buy or sell any security or other product, or to engage in or refrain from engaging in any transaction. In publishing this article we did not take into account the investment objectives, financial situation and particular needs of the reader. You should consult a professional investment adviser before making any decision regarding any financial product. The data and statistics contained in this article were sourced and collated from the Real Estate Agency Survey Benchmarking Report 2007 (“Report”) commissioned by Macquarie Bank Limited ABN 46 008 583 542 and are not indicative of any actual projections or forecasts. The Report is current as at 5 November 2007. Past performance is not a reliable indicator of future performance. Whilst all reasonable care has been taken in relation to the accuracy of contents of this document, no warranty as to accuracy or correctness is given nor should one be implied. For more information, contact the author on (02) 8232 4489 or Jason.email@example.com REIQ Journal July 2008