Questions About Entry-Level Compensation
I recently received a job offer from one of the larger firms that only does investment sales.

   The company by-laws dictate the commission splits with the company: 50/50 to start out.  Once you've been there for 3+years AND had gross commissions of $600k, you move into a graduated commission split schedule.    
    
I haven't worked in CRE before (commodities analyst previoulsy) and recognize that I will require a lot of help and guidance from my mentor while I gain experience and become more acquainted with my target market.  Again, the by-laws layout a template for this:  If you choose to take on a mentor, you will split your cut of your first three deals 50/50.  So the firm takes 50%, the mentor takes 25% and my take home would be 25%.    

This all sounds well and good; I see the benefit (especially for someone in my shoes) to have a mentor that has more experience and can help me run the appointments I secure from cold calling.

Unfortunately, this 3 deal 50/50 split with mentor does not seem to be available to me in the office I would be working at.  I received a compensation structure that seems to almost operate as a brokerage inside the brokerage.  

I would be starting out as an associate giving 50 to the firm, 60 to mentor and 40 for myself (50/60/40).  The expectation is 5 listings per year and 2 closings.  Once I've earned gross commissions totaling $250k+ the commission split would bump up to 50/25/25.  After 3 years and $600k in take home for myself, and at least $350K in one year, I bump up to a 50/40/60 split (40 mentor, 60 for me).  Now the next level up requires the same $600k commissions, but must also be on the team for 5 years.  At this point, become a partner and earn 50/30/70.

For a little background this is 100% commission based income, no draw or anything.  The mentor, or senior partner (whatever you want to call it in this structure), is responsible for paying the internal staff (who does financial modeling and marketing materials), software systems and any associated costs.

Does this seem like a fair structure?  I recognize that starting out I will benefit from more than 3 deals worth of help, before I'm cut loose on my own.  This structure seems to layout that I will never be on my own and will always be sharing commissions with both the firm and the senior partner. **I don't want to negotiate against my future self and sign something now that locks me into a commission split that is already diluted by being under the firm.**

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Thank you for any advice that you care to share.  I'm looking forward to your feedback.
[{"id": "cw4sfp4", "text": "I just don't see why you would be still splitting with the \"mentor\" at year 5. It's not like he's helping you at that point. ", "replies": [{"id": "cw4vtlz", "text": "While I am inclined to agree with you, no one knows what value he would be bringing 5 years from now.  Do you have any tips for how I ask what my ability, down the road, to break away and go on my own is?  Do you think it is a fair set up for the beginning year or two?", "replies": [{"id": "cw5a9pv", "text": "I only do commercial with some personal property on the side so I can't really speak so much as an authority, but that split after 5 years seems a little ridiculous to me.\n\nAn important question to ask them would be when will you get a mentee, that may explain the lack of compensation at year 5. \n\nAlso, with this kind of structure I assume that they will be generating a lot of leads for you?\n\nTo me, the structure between you and the mentor looks like what I would expect the splits to look like with the brokerage. ", "replies": [], "depth": 3}], "depth": 2}, {"id": "cw5umme", "text": "Split after 5 seems dicey unless it's like a 10% sort of thing, or if the mentor agrees to bring you into deals 5 years from now (which would be hard to define, all deals? some deals? if so which?)", "replies": [{"id": "cw62x7a", "text": "Right? 70/30 with 50% to the brokerage just seems a little much after 5 years to me", "replies": [{"id": "cw63cah", "text": "Sounds like a good program for the mentor, until it falls off the track. Unless the mentor is reciprocating by year 2-3 the animosity would probably blow this structure up more times than not. Being a bit of a vet, I can appreciate the mentor's perspective. Always difficult to balance... perhaps they're referring to bringing them onto a team? In that case there should likewise be an agreement for what percentage of the mentor's biz (and others on the team) is shared with the new agent 5-years down the road too. ", "replies": [{"id": "cw6fghm", "text": "It is more of a team set up.  The language is blurred because it's trying to match with the firm's guidelines of mentor but also be a team of it's own.  It does show opportunities to share in the team's deals, but you have to have earned 700,000 and been there for 5+ years.  While I have concerns about the structure for 5 years from now, do you think it seems fair to start out?", "replies": [{"id": "cw72ve1", "text": "Mentorship initially makes a lot of sense for the brokerage, you (improves chances of success greatly) and the team (should help their production). I'd imagine they are able to evaluate and shift gears if it's not working for them and likewise would be reasonable for you to do the same at some point sooner than 5 years.\n\nUnderstand, the veterans have developed clients and methodologies that may have taken 5,10, or even 20+ years to figure out. Even some of the methodologies may seem simple, but the road to develop them into what works best was likely a lot of work and pain. They are at risk for (A) investing time in you... if it doesn't work out, that time can not be recaptured and (B) creating a competitor. It's a bad feeling to have someone replicate what you built with painstaking effort and copying it to start a separate business. Investing 12 months in someone who isn't committed in the first place is also a horrible feeling, especially if the agreement stipulates that you must still compensate them on things they didn't have anything to do with after they've moved on. \n\nJunior agents often overvalue what they're providing to the team and undervalue what the veterans bring. Understandable, as the junior agent haven't yet had a $20MM deal crash, haven't mortgaged the house to the tilt and maxed credit cards to cover the wife + kids, nor awoken at 3 AM to work on a model or presentation that is critical for financial survival. This ignorance isn't the junior agent's fault at all, they simply haven't been down those roads at all. Just try to minimize this blind spot. \n\nFlip side, a number of vets also misconstrue the value a junior agent may bring. This is a shame, there is really no excuse for their not understanding and recognizing when a junior is bringing value. Give the benefit of the doubt to the veterans (due to reasons above) but don't be blind to the fact that this does happen to solid junior agents from time to time.\n\nThere is no clear answer. Guidelines are working with above board people and when you're a part of a team, to always strive to provide more value to them than they're providing to you. Be real, frankly and internally evaluate the value you're bringing to them and the value they're bringing to you.  \n\nWhen the team has the right market, process, and people they can be just about unstoppable and are often their top producers in the market. There is no career as exciting to me as CRE and all the best to you!\n\nPS- Why not ask for a few examples of where this program has been in place with a team for years 2-3-4-5? \nNothing like seeing examples in motion where it is working to learn and make it work for yourself.\nIf there are no examples, that indicates quite a bit as well!\n\nEdit, wording!!!", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "cw7pksg", "text": "Thank you all for your comments and advice.  I find it amazing that you can post a topic and find legitimate answers that are thoughtful and take time to write.  I appreciate all your help, I can't wait to get started.", "replies": [], "depth": 1}]