11:45 – Q&A with Charlie
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In this week's 11:45, Charlie addressed consultant questions regarding commission structures, future business strategies, and company performance. The meeting focused on transparent discussion of financial decisions, industry challenges, and operational changes implemented to maintain competitive positioning in the executive search market.
Key Takeaways
Commission Structure Changes: The new structure maintains 50% commission for consultants billing over $400,000 or working full-time in the office. Assessment will be based on the previous year's performance (looking at December 31st billings) and reset annually, with implementation designed to motivate higher performance.
- Commission structure was originally designed to reset annually and started at 30%, with 50% being the highest tier
- The 50% commission level was initially meant as a top achievement but became standard practice over time
- Company splits (5%) were implemented as an alternative to annual commission reductions
- Full-time office presence or $400K+ billing will maintain maximum commission rates
Industry Challenges: The executive search industry faces significant competitive pressure from low barriers to entry, particularly affecting lower-fee search work.
- Competition has intensified due to widespread access to tools like LinkedIn and AI assistants
- The $20,000-$30,000 fee range has become oversaturated with competitors
- Kimmel is strategically moving toward higher-fee searches ($50,000+) where relationships and expertise matter more
- The company averaged 2-3 placements per week at or above $50,000, including one $281,000 placement
Financial Performance: Current company performance is tracking toward $18 million in annual billings, which is positive but requires sustained momentum through traditionally challenging summer months.
- Q1 performance is slightly ahead of last year but still 10% below the company's best year (2019)
- Healthcare costs have increased from $585,000 in 2021 to $1.1 million in 2024
- Kimmel has limited healthcare premium increases to 11% compared to the national average of 74%