The cuts were initially approved last summer and are set to take effect this July. But as of this spring, Keller Williams was facing multiple class-action lawsuits over the changes.
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Nearly nine months after announcing plans to cut its share of profits from defected agents and a legal battle looming, Keller Williams revealed this week that it has backtracked and will abandon the plan in favor of maintaining the status quo.
The company explained in an email to Inman that on Thursday, its International Associate Leadership Council (IALC) “voted to rescind changes to the profit-sharing plan that were scheduled to take effect on July 1, 2024.” The changes will “reduce the share of profits received by former KW agents who actively compete with our franchises.”
Mark Willis
Mark Willis, who recently returned to his role as CEO of Keller Williams, formally recommended to the IALC that the policy be scrapped. The vote to repeal the changes “passed overwhelmingly,” he said in an email.
“This result reflects our commitment to integrity, teamwork, and seeking win-wins for all involved,” Willis continued. “With today’s vote, IALC has chosen to strengthen our profit-sharing model and make it an integral part of everyone’s The cornerstone of collective success.”
IALC represents Keller Williams employees, market centers and regions in the United States and Canada. The Regional Council elects leadership and deputy representatives to serve on the International Council. In an email Friday, Willis described this week’s IALC meeting as “an unprecedented meeting” and said the vote was “not taken lightly.”
“While IALC members typically meet at our annual events, this time required a special gathering to discuss the future of the KW Profit Sharing Program,” Willis continued.
Keller Williams will not be making these changes and will instead maintain its current policy, which allows agents who joined the firm before April 1, 2020, to receive 100% even if they leave the firm and work for a competing brokerage. Profit share amount.
Keller Williams first announced the now-cancelled profit-sharing changes last August at the company’s Mega Agent Camp event in Austin, Texas. The policy cuts the profit share amount from 100% to 5% for brokers who joined Keller Williams before April 1, 2020 but later left the company and joined a competing brokerage. The IALC approved the policy change last summer.
A policy change made in early 2020 ended lifetime profit sharing for agents who joined Keller Williams after April 2020 but later defected to a competitor. This change remains in effect and is not affected by the latest IALC vote.
The latest changes, announced last year, sparked widespread industry debate and consternation among former members of Keller Williams. By this spring, three former Keller Williams agents had filed a class-action lawsuit against the company. The lawsuits seek to block the changes, with one also seeking $250 million in damages. The three attorneys behind the lawsuit claim the changes amount to a breach of contract and unjust enrichment by Keller Williams.
Inman has asked Keller Williams whether its move to reverse the changes was in response to the lawsuit and will update this story with any information the company provides.
Keller Williams first launched a profit-sharing plan in 1987. The company further explained that profitable brokerage franchisees share approximately half of an office’s monthly profits “with employees who help grow the business in a given month.”
The program was one of many that helped Keller Williams become a real estate powerhouse over the next several decades. It also provides something of an early model for later projects by competitors like eXp Realty, which also seek to return brokerage profits to agents.
In his comments Friday, Willis reiterated the original agent-centric ethos that initially led to Keller Williams’ profit-sharing plan.
“As a company built by agents, for agents, collaboration is at the core of our foundation and culture,” he concluded. “We express our sincere gratitude to today’s IALC participants, whose participation ensured that everyone’s voice was heard and respected on this issue.”
Update: This article has been updated since publication to provide additional background and details about Keller Williams’ profit-sharing plan.
