In 1997, the ALTA® Abstracter/Agent Research Committee began conducting an annual survey of its constituency on a selected topic. Each year the focus of the survey, aside from the core questions, has changed based upon the Committee’s understanding of what the Abstracter/Agent section of ALTA® determined to be timely and of greatest value. In 1999 the Committee undertook a comprehensive survey of salaries and benefits paid to employees of abstracters and agents by position.
In this article, we summarize the third survey in a series designed to describe operating statistics and other characteristics of abstracters and title agents. Information developed in these surveys is helpful in comparing one company with another and in tracking changes in the industry. The compensation and benefits information in the current survey will be useful in determining competitive rates of pay and in comparing labor costs.
This survey of salaries and benefits was conducted during the Summer and Fall of 1999 by The American Land Title Association®. All ALTA® members who are title agents and/or abstracters were invited to participate. In addition to staffing, salaries, other cash compensation, and employee benefits, this report describes types of business activities, gross revenue, operating expense, and other operating statistics. These latter characteristics are comparable with similar information reported from surveys in 1998 and 1997.
How Responses Are Reported
Salary and cash bonus information was surveyed for 19 jobs common to abstracters and title agents. These job categories are: chief executive officer, top legal officer, chief financial officer, chief operating officer, chief information officer, treasurer, controller, title examiner, marketing/sales rep., office manager, escrow officer/closer, accountant/bookkeeper, processor/shipper, abstracter/searcher, secretary, clerical, multi-functional, and receptionist. Gross revenue is the company characteristic most strongly associated with executive and manager compensation. Salaries and cash bonuses for all 19 jobs are broken out for four categories of gross revenue, five categories of staff size, five categories of operating expense, four categories of population (number of people in all of the counties in which the company conducts business), four categories of daily instruments (number recorded daily in all of the counties in which the company conducts business), and two categories based on percent of the business represented by residential transactions. Salary and bonus data is also broken out for seven categories of company type.
Revenue is the most important characteristic associated with compensation. All survey responses are reported for the four categories of annual revenue used in reporting salaries and cash bonuses. The number and percent of respondents in each of those revenue categories is:
|Less than $500,000||51%|
|$500,000 - $999,999||21%|
|$1 million - $3 million||18%|
|More than $3 million||7%|
Fewer abstracters and title agents with revenue less than $500,000 participated in this year’s survey, compared with the 1998 and 1997 surveys. Almost 60 percent of participants in those previous surveys reported revenue less than $500,000, compared with 51 percent in 1999. The proportion of participants with revenue of $500,000-$999,999 increased to 21 percent in 1999 from 13 percent in 1998. The proportion of participants with revenue of $1 million or more is approximately the same as in the two previous surveys. However, in the two previous surveys, a relatively large number of respondents"16 percent in 1998 and 12 percent in 1997"did not report annual revenue. This year’s questionnaire, to encourage a response, asked respondents to check a revenue category rather than report an actual number.
As measured by number of full-time employees, companies participating in 1999 appear slightly larger, on average, than companies that participated in the two previous surveys. The percent of respondents in each of the five salary data reporting categories is:
|1-2 full-time employees||18%|
|More than 25||9%|
Only 11 respondents (three percent) did not report number of full-time employees. Full-time employees range from an average of 4 in companies with revenue less than $500,000 to an average of 50 in companies with revenue greater than $3 million.
Salaries and cash bonuses are also broken out for five categories of operating expense. The percent of respondents in each of these categories is:
|Less than $100,000||10%|
|More than $1 million||16%|
A relatively large number of respondents (139; 34 percent) did not report their 1998 operating expense.
Other respondent characteristics, including total population of the counties in which the company conducts business, transactions recorded daily in these counties, the percent of the company’s business that is residential, and the way the company is organized for accounting and tax purposes, are described under "Survey Results."
A. Characteristics of Surveyed Companies
Among the 29 companies that reported 1998 gross revenue greater than $3 million, 15 (4 percent of the sample) had more than $5 million of revenue, including 6 that reported revenue of more than $10 million.
For all sizes of company, title insurance accounted for two-thirds of revenue. Among companies with less than $500,000 of revenue, abstracts accounted for more than 40 percent of revenue. Among larger companies, abstracts (if any) accounted for approximately 20 percent of revenue. Escrow/closing functions accounted for 19 percent of revenue among the 302 companies reporting. Smaller companies were more likely to have revenue from a law practice and only 16 of 412 respondents reported revenue from a law practice. Table 1 describes gross revenue in 1998.
The largest number of companies, 45 percent of the sample, are organized as Subchapter S corporations. Another 40 percent of respondents, including 59 percent of companies with more than $3 million revenue, are organized as C corporations. Fewer than 10 percent of respondents, mostly companies with less than $500,000 of revenue, are organized as sole proprietorships. Only a handful of respondents are organized as one or another form of partnership. Table 2 describes type of company and geographic location by annual revenue. The geographic distribution of the sample is:
|New England (ME, NH, VT, MA, RI, CT)||1%|
|Mid-Atlantic (NY, NJ, PA)||5%|
|South Atlantic (DE, MD, DC, VA, WV, NC, SC, GA, FL)||4%|
|East South Central (KY, TN, AL, MS)||2%|
|East North Central (OH, IN, IL, MI, WI)||23%|
|West North Central (MN, IA, MO, ND, SD, NE, KS)||33%|
|Mountain (MT, ID, WY, CO, NM, AZ, UT, NV)||12%|
|West South Central (AR, LA, OK, TX)||11%|
|Pacific (WA, OR, CA, AK, HI)||6%|
Companies with less than $500,000 annual revenue reported an average of four full-time employees. One-third reported one to two full-time employees. Companies with revenue of $500,000 to less than $1 million reported an average of 10 full-time employees. Companies with revenue between $1 and $3 million reported an average of 19 full-time employees. Companies with revenue greater than $3 million reported an average of 50 full-time employees. Two-thirds of these largest companies reported more than 25 full-time employees.
Operating expense in 1998 was $400,000 or more among the 273 companies reporting. Companies with less than $500,000 in revenue reported an average of $174,000 operating expense. Companies with more than $3 million in revenue reported an average of $8,343,000 of operating expense, although one-half of these companies reported $4.3 million or less operating expense.
Companies with less than $500,000 in revenue reported an average payroll of $106,000. Companies with more than $3 million revenue reported an average payroll of $4.6 million. As revenue increased, payroll as a percent of operating expense decreased. Companies with revenue less than $500,000 reported that payroll was 69 percent of their operating expense. Payroll was 55 percent of operating expense for companies with more than $3 million of revenue.
B. Employee Cash Compensation
Tables and charts describe average rates of pay and cash bonuses for all 19 surveyed jobs. Total cash compensation is also reported for 7 executive jobs. Low and high rates of pay are reported for all other jobs. Chart 1 compares average rates of pay for all jobs.
Rates of pay, especially among the executive jobs, vary widely. A relatively small number of high-paid executives and/or high-paying companies skews average rate of pay for many of the surveyed jobs. In such cases, the median may be a better estimate than the average of "typical" salary for that job. The number and variety of breakouts for each job is designed to show the wide range of pay reported for most jobs.
Years of experience in the job was surveyed for the seven executive jobs. Although not all companies that reported an executive salary reported years of experience, the comparison between rates of pay of executives with less than 10 years of experience and those with 10 or more years of experience is interesting:
Years of Experience
|Average Salary for||<10||10+|
The entire survey is available from ALTA® for $250 to Association members and for $1000 to non-members. Please direct inquiries to Richard McCarthy at ALTA®, 800-787-ALTA®, extension 216.
Format of Tables and Explanation of Statistics
Several conventions are followed in all tables describing company characteristics and employee benefits:
The base row, the first row in a table, reports total number of respondents and the number of respondents in each of the columns in that table. The number of responses reported by a table may be less than 412 companies when the table reports responses of various groups. Groups that contain fewer than all respondents are identified by a bold-face heading immediately preceding a new base row for that group.
When a table reports categorical responses "for example, "Yes" and "No" answers" the response is represented by two rows. The first row reports the number of respondents who gave that answer. The second row reports the percent of all respondents (in that column) who gave that answer.
In tables that report numbers" for example, offices, employees, annual revenue, and similar distributions" responses are summarized and described by an average and a median. The average is the simple arithmetic mean of all the numbers reported. The median is the middle of the distribution of reported numbers and does not necessarily represent an actual reported number. The median is calculated when three or more numbers were reported.
Compensation Statistics. In the tables that report salaries and cash bonuses, the average is reported in the column labeled "Average Salary" and the median is reported in the column labeled "50% Earn More."
Two percentiles are also reported in these tables. The 75th percentile is labeled "25% Earn More." The 25th percentile is labeled "75% Earn More." These percentiles are measures of location on the distribution of all actual salaries and average salaries reported to the survey. If all the reported salaries are listed from lowest to highest, the 25th percentile is the point at which 25 percent of all reported salaries are lower. The 75th percentile is the point at which 75 percent of all reported salaries are lower.
Actual salary and 1998 cash bonus, if any, was reported for the following jobs:
Actual salary and cash bonus were added to obtain total cash compensation. Average cash bonus and average total compensation are reported for each of these seven executive jobs. The number of companies that reported a cash bonus is reported, along with the 75th percentile, median, and 25th percentile of the reported bonuses.
In the remaining 12 surveyed jobs, many companies reported more than one incumbent. All companies with more than one incumbent reported the average salary or average rate of pay for those jobs. Companies with more than one incumbent also reported the lowest salary or rate of pay, and the highest salary or rate of pay. For each of these 12 jobs, respondents also reported the average 1998 cash bonus, if any.