2022 Best Practices Study

Rule of 20

AGENCIES WITH REVENUES OF:

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

The Rule of 20:

Low

6.7

1.5

-1.3 23.7 48.8 36.1

9.9

-14.3 22.3 45.8 32.6

8.6

Average

23.5 49.3 38.6

28.1 52.7 40.6

26.5 53.9 38.8

21.1 50.1 31.8

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.

Rule of 20

40.6

38.8

38.6

36.1

32.6

31.8

28.1

26.5

23.7

23.5

22.3

21.8

21.1

20.2

18.6

17.7

16.0

15.8

< $1.25M

$1.25-$2.5M

$2.5-$5M

$5-$10M

$10-$25M

> $25M

2021 BPS Average

2022 BPS Average

2022 BPS Top Quartile

Cross Category Comparison

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