2024 Agency Owner Compensation Trends
Agency founders are vital to their businesses, driving culture, strategy, and growth. Yet, determining fair compensation is often a challenge.
Many agency owners wonder: Am I paying myself enough? Should I be earning less and reinvesting more? How do I compare with my peers?
In 2024, Productive, a leading agency management tool, surveyed 161 agency founders worldwide to shed light on these questions. The findings revealed both the complexities of compensation and the satisfaction many owners feel about their earnings.
Survey Insights: Agency Compensation in 2024
The survey drew responses from a diverse group:
- Ownership: One-third were sole owners, another third had two owners, and 28% had 3–5 owners.
- Agency Types: Most identified as digital agencies (48.4%), followed by software development firms and consultancies (~11% each).
- Agency Size: 65% employed 1–20 full-time staff; 54% reported annual revenues of $1–10 million.
- Longevity: Over half had been in business for 10+ years.
Compensation Patterns:
- Salary Structures: 87% of owners received a salary, but only 41% earned dividends, and 30% relied on bonuses or distributions.
- Challenges: 85% of owners struggled to define their own compensation, and only 40% were satisfied with their pay.
- Comparisons: Interestingly, just 9% of respondents believed their peers earned more, suggesting founders may undervalue their own compensation.
Compensation often correlates with revenue, number of owners, years on the market, and company size. The more stable an agency is, the owners start to increase their salaries over time.
- Older Agencies: Prefer stable salaries.
- Newer Agencies: Rely more on bonuses and dividends.
Despite concerns about fairness, the majority of owners earned at or above industry averages. Still, their perception of their own compensation in comparison with others is that they earn below the average (39%) or slightly below average (25%). Only 9% of agency owners think they make more than their peers.
Common Challenges in Owner Compensation
- Cash Flow Management
Owners frequently prioritize business stability over personal income. - Partner Disagreements
Differing views on fair pay can lead to disputes. - Lack of Benchmarks
Without clear industry data, determining appropriate compensation is difficult. - Self-Doubt
Many owners hesitate to pay themselves more, fearing judgment or feeling undeserving. - Balancing Reinvestment vs. Income
Founders often face tough choices between personal earnings and reinvesting in growth.
Overcoming Compensation Challenges
There’s no universal formula for setting owner compensation. However, the following steps can help:
- Track Profitability: Regularly assess your agency’s financial health.
- Use Clear Benchmarks: Research industry standards for fair pay.
- Establish Objective Criteria: Define compensation policies to avoid partner conflicts.
- Seek Advice: Consult peers or experts when needed.
By addressing these issues, agency founders can align their financial goals with personal satisfaction—achieving the happiness they deserve.
Although compensation decisions can be complex, the key lies in finding a balance: ensuring personal income while supporting the agency’s growth. With informed strategies and clear benchmarks, agency owners can confidently value their contributions and enjoy the rewards of their hard work.
You can download the full report here.
