EXp World Holdings, the parent company of virtual real estate brokerage eXp Realty, is overhauling its agent stock program, offering agents a set dollar amount’s worth of shares instead of a certain number of shares when they hit certain milestones.
The company first began offering stock options to agents in 2014 and boasted roughly 400 agents at the time. When the stock option program was introduced, the goal was to make changes when the company hit 16,000 agents, a benchmark it’s rapidly approaching.
“With eXp Realty quickly approaching 16,000 agents, the new sustainable equity plan provides a similar dollar value in equity today as the former plan,” Glenn Sanford, founder of eXp Realty and CEO and chairman of eXp World Holdings, said in a statement. “The major change is that the new program will pay agents a dollar value of shares rather than a stair-stepped number of shares for achieving certain goals. We believe agents and shareholders alike will benefit from the greater predictability.”
When agents complete their first transaction, they will receive $200 worth of eXp World Holdings common stock. When they hit their transaction caps, they’ll receive $400 worth of stock.
For bringing an agent to the company and upon closing of that new agent’s first transaction, they’ll receive $400 worth of stock. Stock grants are priced based on the closing market price of the company’s common stock on the last trading of the qualification month.
The biggest reward comes when an agent is named to the company’s ICON program. To be a member of the program, an agent must demonstrate company culture through giving back – like teaching a class or serving on a panel – as well as hit $16,000 paid in company cap and annual gross commission income of $500,000 or more, with a minimum of 10 closed transactions.
When an agent is named to the ICON program, he or she will receive up to $16,000 in stock offerings, eligible on a yearly basis. $12,000 is awarded and vests after three years, and $2,000 will be issued after each company event — such as The eXp Shareholder Summit and EXPCON — with no vesting period.
eXp Realty’s stock has fluctuated wildly this year. It’s currently trading at $7 but was as high as $19.11 per share in September.
In an effort to offset the losses incurred from providing equity to agents, eXp World Holdings also announced a repurchase program.
“We also believe that this plan matches up well with the company’s commitment to its core value of sustainability,” Jeff Whiteside, chief financial officer of eXp World Holdings said. “As the company continues to grow we want to make sure that we are offsetting a portion of the equity issuances that we provide our agents at eXp Realty.”
“Consistent with eXp Realty’s business model, it is important to us that we continue to reward our agents with equity,” Whiteside added. “We have confidence in our company’s future and believe that this is a prudent use of our cash.”
Purchases under the program may be made in the open market or through a 10b5-1 plan that allows agents to make a certain number of trades at a set time. The cost of shares that are repurchased will be funded through the company’s available capital.
“eXp World Holdings continues, on a consolidated basis, to generate solid cash flow and maintain a debt-free balance sheet with more than $22 million in cash and cash equivalents as of the end of the third quarter of 2018,” Whiteside said. “The company has grown its available cash by more than $17 million since the beginning of the year and we fully expect the company will continue to grow its cash balance through 2019 and beyond.”
