A highly personalized boutique executive search firm with a national marketing, communications, sales, and product management practice and deep experience in the foodservice, hospitality, food and beverage, consumer products, building materials, software, technology and industrial manufacturing industries, Torch Group prides itself on combining affordability with high value “white glove” services, unfailing attention to detail, and consistent high-quality results.
Torch Group Executive Search Fee Structures
The Difference Between Engagement Fee, Contingency and Retained Compensation Models
Executive search fees, structures, and agreements are traditionally based on three types of executive search compensation types or models; retained, engagement fee, and contingency.
Torch Group typically performs retained searches. We are paid an initial up-front fee to recruit marketing, sales, product management, advertising, public relations, communications, and general management executives, and then paid additional retainers throughout the length of the project with the final payment occurring at project completion. Depending on the responsibility or leadership level of the position to be filled and the extent and uniqueness of its qualifications, our fee requirement can range from as low as 25% for an individual contributor to as high as 40% for a senior-level or C-suite executive.
Fee payments are typically structured to occur in three equal installments with the first payment due at the start of the engagement, the second after 30 days or when qualified candidates have been presented, and the final payment in 60-90 days or when the executive has been hired. Because we typically recruit executive level candidates, such as C-suite leaders, executive VPs, Directors, and VPs of Marketing, Sales, Business Development, Brand Marketing, Product Marketing and Product Management, total compensation, base salary inclusive of bonus, can range from $120K to $400K+, with our retained search fees on average being 30% of the placed candidate’s total compensation.
By contrast, engagement and contingency search fees are typically used for lower-level and lower-compensated positions. Both typically are based on 25% of the candidate’s first-year base salary. Engagement fees generally have a portion – typically one-third the total fee, as an up-front payment, with the balance invoiced and due upon project completion. As the name applies, contingency fees are paid in total at the completion of the project.