2020 Best Practices Study

49.7%

45.2%

39.8%

36.6%

32.1%

28.9%

26.2%

25.1%

24.9%

23.5%

20.9%

15.6%

< $1.25M

$1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

Average Top Quartile

51.3%

45.1%

40.8%

38.8%

32.6%

31.9%

27.2%

28.9%

26.4%

25.8%

22.7%

19.3%

< $1.25M

$1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

Average Top Quartile

Note : Pro Forma EBITDA excludes all administrative expenses (depreciation, amortization of intangibles, officer life, interest and other.)

AGENCIES WITH REVENUES OF:

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

The Rule of 20:

Low

4.4

-20.6 22.6 52.0 38.6

-1.0 22.2 46.0 34.3

-2.4 20.4 49.7 32.2

4.8

5.9

Average

23.9 57.4 38.9

18.4 41.0 29.6

18.2 40.7 26.7

High

Top Quartile

The Rule of 20 measures an agency's shareholder returns. It is calculated by adding 50% of an agency's Pro Forma EBITDA margin to its organic commission and fee growth rate. An outcome of 20 or higher means an agency is likely generating, through profit distributions and / or share price appreciation, a shareholder return of approximately 15% - 17%, a typical agency / brokerage return under normal market conditions.

38.9

38.6

34.3

32.2

29.6

27.6

26.7

26.3

23.9

22.6

22.4

22.2

20.5

20.4

19.4

18.4

18.2

17.0

< $1.25M

$1.25M-$2.5M $2.5M-$5.0M $5.0M-$10.0M $10.0M-$25.0M

> $25.0M

2019 BPS Average

2020 BPS Average

2020 BPS Top Quartile

 62