2023 BPS 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

3.8

10.1

5.2

-1.4

-0.3

4.6

Average

24.3

26.9

24.5

25.3

22.4

22.3

High

43.6

43.7

38.2

45.9

42.5

38.1

Top Quartile

30.6

34.7

29.3

31.8

26.7

26.4

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

34.7

31.8

30.6

29.3

28.1

26.9

26.7

26.5

26.4

25.3

24.5

24.3

23.7

23.5

22.4

22.3

22.3

21.1

< $1.25M

$1.25-$2.5M

$2.5-$5M

$5-$10M

$10-$25M

> $25M

2022 BPS Average 2023 BPS Average 2023 BPS Top Quartile

Cross Category Comparison

56