Keller Williams Walks Back Profit-Sharing Cuts After ‘Unprecedented’ Meeting

Keller Williams announced today it is backing down on planned changes to profit sharing that sparked numerous lawsuits by former agents, allowing people who “vested” in the company’s revenue share program to continue receiving their full payments even if they affiliate with a competing brokerage.

In a statement, Keller Williams President and CEO Mark Willis said that after an “unprecedented” meeting and vote by the company’s agent leadership advisory board (known as the International Associate Leadership Council, or IALC), a previously approved policy change which would have dramatically cut revenue share for agents who compete with their former employer will not be implemented as planned.

“The outcome serves as a reflection of our commitment to integrity, teamwork, and finding a win-win for all involved. With today’s vote, the IALC chose to reinforce our profit-sharing model as a cornerstone of everyone’s collective success,” Willis said.

Having pioneered a real estate business model that pays agents for recruiting other agents through a multi-tiered system of revenue sharing—even after they move on from Keller Williams—the company had received swift pushback when it announced last year that many former agents would be seeing their payments cut by as much as 95% unless they retired, or re-joined the company.

In March, several of those former agents filed class-action lawsuits in a handful of federal district courts, claiming that the policy change violated contracts which promised unconditional participation in profit sharing regardless of agent affiliation—at least for those who had already “vested” in the program.

According to those lawsuits, Keller Williams had realized in 2019 that it was paying more than $25 million a year to agents who were now in competition with the company, and moved to make changes. The profit-sharing cuts would have gone into effect on July 1 of this year.

According to Keller Williams spokesperson Darryl Frost, votes on policies like the profit-sharing program typically happen at the company’s annual “family reunion” or “Mega Agent Camp” events. But the IALC met yesterday seemingly to address this policy, with Willis making a formal recommendation to rescind the policy change.

“The vote, which required everyone to take a close look at our values and the structure of our business, wasn’t taken lightly,” Willis said in his statement, saying those in favor of reversing the change constituted “an overwhelming majority.”

Keller Williams has claimed that a typical franchise pays roughly 50% of monthly profits to associates, and has paid out more than $1.7 billion over the course of the company’s history. It was unclear exactly how many agents would have been affected by the planned change.

Source link

About The Author

Scroll to Top