2025 Best Practices Study

Executive Summary

Profitability

Employee Productivity

Rule of 20 Score

The Rule of 20 measures an agency's shareholder returns and is calculated by adding 50% of an agency's Pro Forma EBITDA margin to its organic commission & 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.

Pro Forma Metrics:

Top Quartile

30.3%

Average

25.7%

24.9%

21.7%

Number of Employees

67.2

Revenue per Employee

$248,526

$291,823

29.5

Compensation per Employee

$143,285

$116,309

22.0

Pro Forma Pre-Tax Profit PROFITABILITY & PRODUCTIVITY

Pro Forma EBITDA

Spread per Employee

Comparison Group Average Top Quartile

$105,241

$124,916

Average

Top Quartile

Organic Growth & Profitability Scatter Plot

The graph to the right provides a look at the Rule of 20 results for agencies in this revenue category. The solid black line represents all combinations of organic growth and EBITDA margin that result in a Rule of 20 score of 20.

Note: Firms identified as outliers have been set to have a maximum growth of 30% or a maximum profitability of 50%. They appear on the graph line bordering the chart instead of plotting their actual results.

$10-25M

43