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Captain commission on a sold yacht
disimp
Posted: Tuesday, January 17, 2012 8:09 AM
Joined: 17/01/2012
Posts: 10


Does anyone know what the industry says that the Captain should get from the broker if the yacht is sold while the captain is on board, I have heard that a broker will pay the Captain part of the commission or a bonus,my boy friend runs a 48m Yacht which is being sold and he dosn't know what the standard is....can anyone give us some help ?

junior
Posted: Tuesday, January 17, 2012 8:47 AM
Joined: 14/01/2009
Posts: 1026


Each situation is different. Each Captain is different. The normal guideline is for the captain to ask the broker for the same percentage kickback that he extorted from contractors for paint jobs, engineering, bunkering, provisioning and purchasing while he was Mast'a of the yacht. Once this is clarified he should approach his owner and ask for a nice tip when the sale goes thru. If hes lucky, he will be hired on by the new client and can start all over again.
Anonymous
Posted: Tuesday, January 17, 2012 6:11 PM
It is NOT standard nor ethical for a broker to pay a captain a pre-agreed upon commission. If the captain is not a licensed broker in the deal, then the buyer expects the captain’s role to be neutral. There are brokers who have been sued by buyers over a grievance aggravated by the fact that it was later disclosed that the captain was paid. Some brokers express their gratitude for a job well done by giving a captain a tip or a gift after the sale which can be sizable in some cases. But it reflects very poorly on a captain who EXPECTS the money. And there are many yacht buyers and sellers who think that kind of transaction reflects badly on both the broker and captain. As Junior said, it is perceived as bribery. And it is no more appropriate for a captain to expect a percentage of a broker’s commission than it would be for that broker to expect a captain to fork over a percentage of his salary if that broker found him a lucrative position. If your boyfriend does his job well, then he may be rewarded, but if he demands a commission from his broker, he may ruin his reputation with someone who could potentially advance his career. If he wants to be a broker, he can go be a broker otherwise he should worry about doing his own job that he is already being paid for.
Barry
Posted: Tuesday, January 17, 2012 7:08 PM
Joined: 02/06/2008
Posts: 5


Anonymous -you put it perfect! A captain on a 48m yacht that is worth their salt will know most all industry standards. A captain with their hand out should not be considered industry standard.
S_ellicott
Posted: Tuesday, January 17, 2012 8:18 PM
Joined: 20/09/2010
Posts: 4


Thank you junior found your post very entertaining.... Shared it with the rest of the crew!
disimp
Posted: Tuesday, January 17, 2012 8:24 PM
Joined: 17/01/2012
Posts: 10


Thanks for you help with this, I understand what your thoughts are but it was the broker that initiated the conversation and he said that his firm generally paid between 1 - 3 % its a Florida company so we are unsure of the situation

junior
Posted: Tuesday, January 17, 2012 9:02 PM
Joined: 14/01/2009
Posts: 1026


Perhaps Ft Lauderdale is different. In my world its unproductive to put your hands into the pockets of a broker. Its far better to protect the brokers interests while cultivating a working relationship. . . During your career you will need influential brokers and yacht managers to reliably feed you new opportunities. Commission Money is chump change compared to opportunity. I have never used a crew agent...only quality yacht brokers and managers to secure my next program.
Anonymous
Posted: Tuesday, January 17, 2012 11:08 PM
..and don't forget to tell your boyfriend to clean out the petty cash from the safe before handover, the new owner will never know.

CaptErik
Posted: Wednesday, January 18, 2012 1:06 AM
Joined: 09/09/2008
Posts: 64


Love it when this comes up from time to time. NONE, ABSOLUTELY NONE of the money is the owners on either side, it is out of the brokers commission It does not change the deal one iota, there are lots of cases that the captain is the one to actually do the selling of the yacht, the broker just shows up to collect a fee. It is wise to check with your owner though, and see if it is ok with him. I have even known owners to require a broker to give a percentage of his commission, because he knew it was the captain that had done the work. A kickback on items purchased by a yacht are criminal, and do come out of the owners pocket, so all you people (junior) please explain how the money has anything to do with the owner, and how it is costing him a dime? The brokerage fee is a pre agree'ed amount.Please enlighten me, and by the way, there is no set rule as to percentage, there is no rule that says you deserve anything. I do find it interesting that they offered this to you, gave you a percentage and now are checking to see if others think you are getting the shaft or a really good payout. not knowing if it is a bayliner or a 50 meter yacht, makes it hard for others to know, and even then, not knowing what service you are performing makes it hard as well.
junior
Posted: Wednesday, January 18, 2012 4:35 AM
Joined: 14/01/2009
Posts: 1026


If the owner would like to reward his captain and crew for thier assistance selling the boat..Great !!! Anything else is a conflict of interest. When the yacht is put up for sale, your job as crew is to do everything to insure a quick sale at best price. Meet and greet client weekends, entertaining keelkickers...what ever it takes. Asking a broker for a kickback only compromises your owner. Consider Two sisterships from the same brokerage. One yachts captain is commission free, the other yachts captain wants to stick his grubby hand in the brokers pocket. Naturally the yacht which earns the broker the best commission will be sold first. Captain Kickback just lost a sale for his owner.
Anonymous
Posted: Wednesday, January 18, 2012 6:47 AM
If you have an employment contract, there is usually a section which covers all of this. Typically....... if employee receives any payments in the form of money or goods for any services or concessions, discounts, cash back given, these are to be considered as the employers, and not to be accepted personally without the employers express permission. Tread very carefully. Check your employment contract if you have one, as if you accept any form of payment without the employers knowledge and approval, this can legally be seen as breach of contract, fraud or embezzlement.
disimp
Posted: Wednesday, January 18, 2012 8:24 AM
Joined: 17/01/2012
Posts: 10


someone also told me that it is illegal for a Florida broker to pay off a captain..does anyone know if this is true


Anonymous
Posted: Wednesday, January 18, 2012 2:17 PM
If anyone thinks that a broker just "Shows up and collects a fee," then they should try being a broker. Why bother being a captain when you can just pay a small fee, become a broker and then just watch the money magically roll in off the backs of the captains? Brokers are on call 24/7 and work every bit as hard as a captain, in some cases much harder. A captain works for one owner, a broker is usually working with many owners at a time and only gets paid if he can put the owner together with the right boat under the right terms. The process can take YEARS where the broker is out of pocket for all the expenses until the right boat is finally found. Whatever role the captain may play in the process is one he is already being paid to do by the seller or buyer. The captain's role is to be honest about the one boat they represent and to present it in a way that reflects well on the seller. The seller is the the one paying the captain, if a captain has any merit, he understands that responsibility. The same expectation is true on behalf of the buyer if a captain is working for a buyer. It is not specifically against the law for a yacht broker to offer payment to a captain for a job well done and many brokers will happily pay a finder's fee to a captain who brings them a buyer. But if the broker arbitrarily offers a captain a stake in the sale, he can be sued by the buyer for it, and there are cases where this has happened and the broker has lost. If you approach your broker and give the broker the impression that you would sabotage the sale of the boat unless you are part of the deal, your broker will likely take that information to your employer and you may find yourself out of a job sooner than you expected.
disimp
Posted: Wednesday, January 18, 2012 6:46 PM
Joined: 17/01/2012
Posts: 10


Thanks for the advice.  The Broker is the central agent and it is he who has offered my partner 1- 3% of the sale, can my partner (The Captain) be sued because he accepts the fee ?

MarineDex
Posted: Wednesday, January 18, 2012 8:43 PM
Joined: 22/04/2010
Posts: 45


This is an interesting topic and I would like to put my own angle on the subject.


What is a broker?

A broker is an individual or company hired by the owner to facilitate the sale or charter of the vessel.

What are crew?

Indivuals employed by the owner/management company to ensure the safety running order of the vessel during navigation or in port.

I would like to point out something THEY ARE BOTH EMPLOYEED BY THE OWNER.  One is getting paid a salary the other is on commission. If I put my house up for sale with a broker but find a friend to buy it off me directly, I would have to pay the broker a reduced fee for his services but would keep the additional commission for myself. If a friend or employee sold the house to someone I would pay them a commission for their assistance in selling the house. So then why doesn't that cross over to the yacht? I know that selling a boat is not only the work of the captain but the crew and broker so I think it should be shared. I do believe the owner should insist upon it in the terms of the agreement since it will be a team effort is selling something that large.

New owners turning up to a boat will always ask the opinion of the captain and crew usual since they don’t trust anyone let alone a broker. But he knows there loyalties currently lye with the guy that pays them. Crew will usual provide additional information and experience however they are both there to sell the boat from different angles for the same person. An owner that wants an honest opinion of a boat will hire his own captain and a survey company to tell him the facts. Image it like buying a 2nd hand car do you ever ask the broker about the service history or do you call AAA?

Anyway selling the boat is not a kickback or backhand on services provided to the yacht it is a commission for the sale of a vessel. The broker should know if they don't already that they would sell more boats if they weren’t always interested in their commissions. 


Anonymous
Posted: Wednesday, January 18, 2012 11:06 PM
Late last year the UK Government passed into Statue Law legislation which makes this type of commission illegal, as it is technically a form of a 'kickback'. So be weary British nationals, as YOU are still subject to UK Statute Law wherever you are in the world!
disimp
Posted: Thursday, January 19, 2012 12:39 AM
Joined: 17/01/2012
Posts: 10


OMG.......my partner received over 350,000 in what we thought was OK from a Bonifide Broker as a commision not a kickback, they even asked for his passport before it was all signed off

Henning
Posted: Saturday, January 21, 2012 1:08 AM
Joined: 01/06/2008
Posts: 1053


junior wrote:
Perhaps Ft Lauderdale is different. In my world its unproductive to put your hands into the pockets of a broker. Its far better to protect the brokers interests while cultivating a working relationship. . . During your career you will need influential brokers and yacht managers to reliably feed you new opportunities. Commission Money is chump change compared to opportunity. I have never used a crew agent...only quality yacht brokers and managers to secure my next program.


No, it's not different. The majority of people operating in this industry regardless of location or origin operate in unethical manners. The whole kickback mentality is nothing but embezzling and it happens everywhere. The sale & brokerage side is a bit different from the maintenance and operations expense side though. There he is taking from a predetemined pie of a sales % that all those involved in the sale process take from. There are some times when during the course of the sale that a captain can be helpful in the sales process, in that case they have earned their piece of the pie. I have received cash gifts from brokers before for helping sell someone on a boat. I didn't ask for or expect it, but I did accept it.

I was given a kickback from a yard once that I totally wasn't expecting, I gave the check to the owner and he gave me 20% of it back for being honest.

Henning
Posted: Saturday, January 21, 2012 1:22 AM
Joined: 01/06/2008
Posts: 1053


disimp wrote:
Thanks for the advice.  The Broker is the central agent and it is he who has offered my partner 1- 3% of the sale, can my partner (The Captain) be sued because he accepts the fee ?


Who would he be sued by, the owner? No problem there because the broker giving the captain a cut doesn't come out of the owners pocket as an overage of what he contracted to pay. When things go right, the broker and captain/crew work hand in hand making sure that everything is perfect for the showings and spending time with buyers, surveyors, inspections and sea trials. The broker appreciates this and is paying the captain out of his earnings and the captain splits it with the crew who also did extra duty. It's really no different than getting a tip at the end of a charter well done. It comes out of the pocket willingly from the person who received the services.
 So long as he does so out of his own free will, no problems. If the captain however approaches the broker and says, "you pay me 3% or I'll make sure you don't sell this boat", then there are multiple ethical, criminal and civil, doors to trouble that they have opened.

Henning
Posted: Saturday, January 21, 2012 1:26 AM
Joined: 01/06/2008
Posts: 1053


disimp wrote:
someone also told me that it is illegal for a Florida broker to pay off a captain..does anyone know if this is true

Not as a general statement as you made, no. There has to be a criminal element to it, and as far as I know, giving someone your earnings of your own will is not criminal yet.



disimp
Posted: Saturday, January 21, 2012 5:24 AM
Joined: 17/01/2012
Posts: 10


I know that the buyer of the yacht wouldnt have known that my partner was to receive a commission, will this cause any problems to the buyer, now that we work for the buyer

disimp
Posted: Saturday, January 21, 2012 6:52 AM
Joined: 17/01/2012
Posts: 10


I have read all the comments and was wondering if it was fair to say that every super yacht Captain should receive a commission on the sale of the Superyacht, say on average if it was around 2.5%

- if this was the norm wouldn't the broker still receive 7.5% as some of the comments say the Captain is the one doing a lot of the sales work in showing buyers the yacht and doing sea-trials

Captain Andy
Posted: Saturday, January 21, 2012 9:55 AM
Joined: 17/09/2008
Posts: 93


Be very wary! If your 'slice' hasn't come out of the Brokers comission, the New Owner may sue you for this sum to be returned as he hasn't entered into a contract with you- either implied or explicit - for you to be paid any sum to help sell the yacht! Basically, does the new Owner know about this sum?
disimp
Posted: Saturday, January 21, 2012 12:16 PM
Joined: 17/01/2012
Posts: 10


as far as we know the new owner dosn't know, our thoughts are that it was a matter between the broker and the buying owner.....I doubt if the broker mentioned to the buyer that my partner was to receive a commission when he was acting as the Captain, we don't know any of the legal contract stuff of the sale...It was all done in the background

Henning
Posted: Saturday, January 21, 2012 1:25 PM
Joined: 01/06/2008
Posts: 1053


Captain Andy wrote:
Be very wary! If your 'slice' hasn't come out of the Brokers comission, the New Owner may sue you for this sum to be returned as he hasn't entered into a contract with you- either implied or explicit - for you to be paid any sum to help sell the yacht! Basically, does the new Owner know about this sum?


Every brokerage contract I have ever seen the sales commission is paid by the seller. The buyer has nothing to say about it and no position to sue within the US over this. The new owner knows that a sales commission percentage was paid on the deal he himself approved the negotiations of. That percentage was set long before a sales contract was signed, it is stipulated in the listing agreement signed by the seller and has absolutely nothing to do with the buyer. Since there is no way that the buyer has sustained damages, and this isn't a situation where statutory damages are applicable he has no grounds to sue.

If the money didn't come out of the commission kitty, then the payment the capt received is the least of the crimes that was committed.

Captain Andy
Posted: Saturday, January 21, 2012 2:25 PM
Joined: 17/09/2008
Posts: 93


Quite right Henning ..... there are several variables that need to be taken into account with application of staute laws, namely: Flag state, Port state (via geographic position if the vessel is inside certain limits)and, lastly, nationality of the crew. It's a complex subject as people will find out if they read into it!! LOL
Anonymous
Posted: Sunday, January 22, 2012 2:34 AM
To make the claim that the captain is the one who does most of the work to make a boat sell is ridiculous. The captain’s only responsibility when the boat is for sale is to respect his boss’s decision and present the boat to potential buyers in the most favorable light possible. Does the captain qualify the buyers? Does the captain pay to market the boat? Does the captain know anything about the law or how to properly negotiate the contract? Does the captain have the ability to draw potential buyers to their boat? Does the captain escort each potential buyer through dozens of boats at his own expense until the right boat is available? Saying that the captain is the one who does all the work in generating a sale is about as accurate as those who would say all a captain does is drive the boat and the rest crew does all the real work. It is a genuinely naïve statement. If a captain wants to get a commission for selling boats, he should get his broker’s license and see how difficult that job really is.
disimp
Posted: Sunday, January 22, 2012 3:36 AM
Joined: 17/01/2012
Posts: 10


But why did the brokerage decide to pay my Partner, It must be standard that the brokerage houses pay off the Captain, If they do then there must be some unwritten rule amongst the brokerage houses, In a free market they must have a going rate and one would think that they all make payments..is that true ?????

Henning
Posted: Sunday, January 22, 2012 3:24 PM
Joined: 01/06/2008
Posts: 1053


disimp wrote:
But why did the brokerage decide to pay my Partner, It must be standard that the brokerage houses pay off the Captain, If they do then there must be some unwritten rule amongst the brokerage houses, In a free market they must have a going rate and one would think that they all make payments..is that true ?????


It's an incentive for the captain to make sure the boat is in best condition and is shown in its best light with charter quality service on a showing. Let them really feel what they are in for at it's best.... That helps close deals and that has value. Like I said, it's a pre-negotiated tip for a service well performed, you let them know it up front and more likely you'll get that level of service from the crew. 1-3% of the deal is not a bad figure and makes a concerted effort worthwhile.

Anonymous
Posted: Monday, January 23, 2012 12:28 PM
Disimp, you are leaping to conclusions and only listening to what you want to hear. It is DEFINITELY NOT standard for a brokerage to automatically give the captain a percent of the commission. There are many brokers who will give a captain a gratuity if they conduct themselves with a very high degree of professionalism, but it is something that is dictated by each individual broker/ brokerage and the ethics of doing so are very debatable. For that reason there are brokerages who have strict policies against giving the captain any monetary compensation which may jeopardize the brokerage's reputation and their relationship and with their clients.
disimp
Posted: Tuesday, January 24, 2012 3:29 AM
Joined: 17/01/2012
Posts: 10


I hear what everyone is saying and debate is good for all concerned : 

Is there a list of which brokerages pay commission to Captains and which Brokerages don't pay commissions it would be good for us crew to know who to deal with ????? can anyone help.

I  read on the UK high court document that Merle wood was asked to agree to a 3 million dollar commision to the Captain, this was for when Darius was sold, doe anyone know about this ?

 
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