Where’s the Big Payday?

Another agent equity program debuted last week. That got me thinking about whether or not agents are interested in equity plays. The hullabaloo over equity in the late ‘90s really fizzled out. That’s no surprise since the Telecom Bust soon followed, leaving CLECs’ and resellers’ hopes of being bought for ridiculous multiples dashed. Agents’ hopes of cashing in went right along with them.

Indeed, few programs seemed to payoff:

• In summer 2001, Lightyear paid an equity disbursement excess of $6 million to each of its "founding agents" after a merger with VarTec Telecom Inc.
• In spring 2003, switchless reseller Telcorp Ltd. issued agent equity payments after its acquisition by NUI Telecom. Payouts ranged from $25,000 to $700,000, or 12.5 percent to 65 percent of an agents contribution to the company's revenue.
• More recently, the acquisition of Mpower Communications Corp. by TelePacific Communications in summer 2006 triggered more than $500,000 in payouts to Mpower agents.
• I’m told PAETEC also paid out a limited number of warrants issued to agents when it went public through its merger with US LEC in March 2007.

I might be missing some others – feel free to set me straight. But you can see how this list underwhelms and leaves some agents wondering: Where’s the big payday?

In a last week’s PHONE+ poll, agents revealed their skepticism about agent equity plans:

More than half (52 percent) said they don’t make sense. Critics overwhelmingly said equity plans are merely recruiting tactics by companies that rarely, if ever, sell. Other reasons they dissed them were that equity percentages are too low for an agent to get a significant payout and the thresholds for vesting require agents to risk too much revenue with one company.

That said, nearly as many voters (48 percent) think equity plans are just fine, thank you very much. Fans said equity is the only chance for agents to get a big pay and to “own” the customer. A few were less idealistic, saying you might as well sell for a company that’s willing to give you something if it does sell.

What do you think? The poll remains open through Monday, June 22. Vote today! Or click on the comment link below.