understanding nextage compensation plan
TRANSCRIPT
Understanding the Compensation Plan
The Nextage Compensation Plan
3 Components of the plan:1. Franchisee Allocation
2. Commission on Personal Production
3. Sales Bonuses on Team Productiona) Spread
b) Generation
Gross Commission Income vs Net Commission Income
Gross Commission Income (GCI): Total amount of revenue generated
to the company from a closed transaction side
Net Commission Income (NCI): Amount of GCI left after deducting
6 ½% $250 transaction fee
GCI/NCI Example:
GCI $10,000
less 6 ½% $650
less $250 $250
= NCI $9,100
1. Nextage Franchisee Allocation
On every transaction side closed within a Nextage franchisee’s company, the franchisee receives:
• 1.625% of the GCI• $250 transaction fee• 3.5% of NCI
Franchisee Allocation Example:
GCI $10,000less 6 ½% $650less $250 $250
= NCI $9,100
Franchisee Receives:1.625% of GCI $162.50Transaction fee $250.3.5% of NCI $318.50
Total $731.00
2. Commission on Personal Production
Commissions on personal production are based on the broker’s/agent’s commission split & the transaction’s NCI.
Commission splits range from 55% of NCI to 80% of NCI. Promotions to higher commission splits are based on achieving certain levels of production established by the franchisee.
The following chart provides recommended promotion guidelines*.
*Benchmarks will vary depending on the marketplace in which the franchisee is located.
Commission on Personal Production
6 closed sides or $45,000 GCI in any rolling quarter80%
5 closed sides or $37,500 GCI in any rolling quarter77%
4 closed sides or $30,000 GCI in any rolling quarter74%
3 closed sides or $22,500 GCI in any rolling quarter71%
2 closed sides or $15,000 GCI in any rolling quarter 68%
3 closed “mentored” sides 65%
Entry Split for Sales Associates New to the Business (“Newbie’s”)
55%
Benchmark Requirements to be completed for Promotion from Previous Commission Split Percentage Based on the Number of “Closed Transaction Sides” Completed or “GCI” Generated in a rolling quarter.
Split Percentage Payable to Sales Associate
Benchmarks will vary depending on the marketplace in which the franchisee is located.
Commission on Personal Production Example
GCI $10,000less 6 ½% $650less $250 $250
= NCI $9,100
Agent’s commission split: 74%$9,100 x 74% $6,734
3. Sales Bonuses on Team Production
Sales bonuses are paid to the upline Team Leaders of a broker or agent who close a transaction side.
Sales bonuses are based on the upline Team Leader’s Leader Contract level and the transaction NCI.
Leader Contract levels and requirements for promotion from one level to the next are as follows (all production is based on a rolling quarter):
Sales Bonuses on Team Production
6 direct active agents and 80 team agents
80 team closed sides or $600,000 GCI (rolling ¼)
80%Executive Sales Director (ESD)
5 direct active agents and 50 team agents
50 team closed sides or $375,000 GCI (rolling ¼)
77%National Sales Director (NSD)
4 direct active agents and 30 team agents
30 team closed sides or $225,000 GCI (rolling ¼)74%
Divisional Sales Director (DSD)
3 direct active agents and 15 team agents
15 team closed sides or $112,500 GCI (rolling ¼)71%
Regional Sales Director (RSD)
2 direct active agents and 5 team agents
5 team closed sides or $37,500 GCI (rolling ¼)68%
Senior Sales Director (SSD)
1 Active Nextage agent
1 closed side – individual or Team65%
Sales Director (SD)
Entry Level55%
Sales Consultant (SC)
Additional promotion requirements
Requirements for promotion from previous level
Leader Contract Percentage
Nextage Leader Contract
3a. Sales Bonuses on Team Production – “Spread”
A “spread” sales bonus is earned when the recruiter of an agent who closes a transaction side has a higher Leader’s Contract than the agent’s commission split.
Example:– Sally recruits Tim
– Sally has a Leader’s Contract of 80%
– Tim has a commission split of 68%– When Tim closes a transaction, Sally earns a 12%
“spread” sales bonus
Diagram of Previous Example
Sally – ESD (80%)Leader’s Contract
Tim – 68% Commission Split
12% spread(80% - 68%)
Sales Bonuses on Team Production – “Spread”
The “spread” continues throughout the entire hierarchy as long as a difference in the upline Leader’s Contract and the agent’s commission split exists.
Example:– Sally recruits Tim and Tim recruits Jerry
– Sally has a Leader’s Contract of 80%
– Tim has a Leader’s Contract of 74%
– Jerry has a commission split of 68%– When Jerry closes a transaction, Sally earns a 6%
“spread” sales bonus & Tim earns a 6% spread sales bonus.
Diagram of Previous Example
Sally – ESD (80%)Leader’s Contract
Tim – DSD (74%)Leader’s Contract
Jerry – 68%Commission Split
6% spread(80% - 74%)
6% spread(74% - 68%)
Other ExamplesSally – ESD (80%)Leader’s Contract
Tim – DSD (74%)Leader’s Contract
Jerry – SSD (68%)Leader’s Contract
6% spread(80% - 74%)
6% spread(74% - 68%)
Diane – 65%Commission Split
3% spread(68% - 65%)
Other ExamplesSally – ESD (80%)Leader’s Contract
Tim – DSD (74%)Leader’s Contract
Jerry – SD (65%)Leader’s Contract
6% spread(89% - 74%)
Diane – 71%Commission Split
3% spread(74% - 71%)
3b. Sales Bonuses on Team Production – “Generation”
A “generation” is created when both the upline Team Leader and the agent have Leader Contracts of at least 65% (Sales Director).
Example:– Sally recruits Tim
– Sally has a Leader’s Contract of 80% – Tim has a Leader’s Contract of 65%– Tim is Sally’s first generation– Sally will earn a first generation sales bonus in
addition to a spread sales bonus on Tim’s production
Diagram of Previous Example
Sally – ESD (80%)Leader’s Contract
Tim – SSD (68%) Leader’s Contract
1st G
ener
atio
n
12% spread
Generation Sales Bonus Plan
¼% of NCI6th
¼% of NCI5th
½% of NCI4th
2 ¼% of NCI3rd
3 ¾% of NCI2nd
7 ½% of NCI1st
% Sales Bonus paid to Team LeaderGeneration Level
Generation Sales Bonus Example
Example:– Sally recruits Tim– Sally has a Leader’s Contract of 80% – Tim has a Leader’s Contract of 55%– Tim is NOT Sally’s first generation
In this example, Sally will earn a “spread” sales bonus but not a generation sales bonus
Diagram of Previous Example
Sally – ESD (80%)Leader’s Contract
Tim – SC (55%) Leader’s Contract
No
Ge
nera
tion
25% spread
Note: Tim only has to recruit 1 agent and have 1 closing (personal or Team) to advance to the Sales Director level. Then he will become Sally’s first generation.
Sales Bonuses on Team Production – “Generation”
The commission split of the agent closing a transaction is considered to be his/her Leader’s Contract on that particular transaction.Example:
– Sally recruits Tim and Tim recruits Jerry– Sally has a Leader’s Contract of 80% – Tim has a Leader’s Contract of 74%
– Jerry closes a transaction & has a 55% Leader’s Contract but a 68% commission split
– Jerry is considered to be Tim’s first generation & Sally’s second generation
– Both Sally & Jerry earn generation sales bonuses
Diagram of Previous Example
Sally – ESD (80%)Leader’s Contract
Tim – DSD (74%)Leader’s Contract
Jerry – 68%Commission Split
6% spread
6% spread2nd G
ener
atio
n
1st G
ener
atio
n
Jerry closes a transaction personally:
Even though Jerry only has a Sales Consultant Leader’s Contract, since he is the selling agent in this transaction he is considered to be a Sr. Sales Director.
Other Examples
Sally – ESD (80%)Leader’s Contract
Tim – DSD (74%)Leader’s Contract
Jerry – 55%Leader’s Contract
6% spread
3% spread
2nd G
ener
atio
n
1st G
ener
atio
n
Diane – 71%Commission Split
Diane, Jerry’s only recruit, has a closing – Jerry’s 1st:
Other Examples
Sally – ESD (80%)Leader’s Contract
Tim – DSD (74%)Leader’s Contract
Jerry – 65%Leader’s Contract
6% spread
3% spread
Diane – 71%Commission Split
Because Diane had a closing, Jerry becomes a Sales Director:
Other Examples
Sally – ESD (80%)Leader’s Contract
Tim – DSD (74%)Leader’s Contract
Jerry – SD (65%)Leader’s Contract
6% spread
3% spread
Diane – 71%Commission Split
3rd G
ener
atio
n
1st G
ener
atio
n
2nd G
ener
atio
nAs a Sales Director, Jerry earns a 1st Generation Sales Bonus:
