Lauren Elliott-Cranford profile picture
Lauren Elliott-Cranford profile picture

Lauren Elliott-Cranford

Global Operations Director

Capped Bonus vs Commission... the eternal "Risk vs Reward" debate

As the market is changing, I am seeing SaaS sales people moving out of startup land and into some of the bigger corporate players - not that surprising perhaps, but what HAS surprised me is that they are accepting salaries that are a bonus instead of commission, AND a capped bonus at that!


Is this a knee-jerk reaction to the market, or a sign that the culture of sales is changing?

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10 comments

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poweredbycaffeine
WR Lieutenant
7
โ˜•๏ธ
It's certainly interesting from both the employee's security point of view and the company's strategy point of view.

Employees want to know that if they hit their numbers and play the game of attaining OKRs they'll get paid $X no matter what. Employers also have an easier time budgeting burn and runway because they know they must reserve $Z for yearly bonus payments. CFOs and Boards will love that, no doubt.

However, if you're capping...well, you're ๐Ÿงข. Is there truly no way to overachieve the bonus structure for the year? An insurance company that I worked for had the OTE set for a rep with a capped bonus, but they could still earn above based on accelerators.
CuriousFox
WR Officer
0
๐ŸฆŠ
Those sweet sweet accelerators ๐Ÿ”ฅ
oldcloser
Arsonist
5
๐Ÿ’€
Weโ€™re seeing a shift. But the notion of uncapped is now and has always been a fallacy. Commissions have always been capped by variables in the sales process like cycle, hours in a day, individual talent, etc.

Uncapped commissions in a comp plan means as much as unlimited PTO.

I believe the โ€œbonus onlyโ€ prop is another way to lock in commissions against gross sales for bean counters.
Pachacuti
Politicker
4
They call me Daddy, Sales Daddy
Why would they accept bonus over commission? Uncertainty. Both in the economy and in themselves.

It also tells me these are temporary stops on their career journeys. They will stick around for the bonus but will have one foot already out the door they day they start.
Kosta_Konfucius
Politicker
1
Sales Rep
If you are right out of college, it might be just trying to get a role and not understanding what questions to ask
Justatitle
Big Shot
1
Account Executive
capped, uncapped, provided it's real I don't really care
FinanceEngineer
Politicker
1
Sr Director, sales and partnerships
Sales is changing as start-ups lose some of their luster. Also, as you move up in an org, comp gets a LOT more structured and capped bonuses start making sense. I had a startup that hasnโ€™t even raised money yet ask about my companies financials/runway before next steps on a call.
Maximas
Tycoon
0
Senior Sales Executive
Definitely that is due to the massive layoff circle that took place recently that made employees stand out for job security way more than the unguaranteed commission scheme at a risky startup land!
CPTAmerica
Opinionated
0
President/CRO
Top performers wonโ€™t make that switch
0
Global Operations Director
Interesting quote from the CEO of Spiff (one of the newsales commission softwares on the block)

โ€œWeโ€™ve seen a lot of commission plans change,โ€ Paul told TechCrunch. โ€œIncentives end up driving a lot of the behavior of your go-to-market motion, so when you hit recessions, and whatever weโ€™re in right now, that go-to-market motion changes a lot, which means your commission plans change a lot.โ€

Full article: https://techcrunch.com/2023/05/16/spiff-sales-commission-50m-series-c/

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