AGuyInSales

Area Sales Leader

Comp model question

I am a sales leader. This is the first time my office has had a sales leader and the first time this comp model was developed. I was given a comp model with an override from my entire team's gross sales. I/we sold more than expected (3x the prior year's sales numbers) and originally my number was included in the override (yes I got an override on the entire sales team and it included my sales number). 2024's comp model proposes removing my number from the override calculation. It also lowers and caps the bonus at $100,000 . This year's override bonus was almost $200,000, in the new model if we sell the same amount in 2024 I would make roughly $85,000.

I am a high achiever. Individual production in top 5% of the company consistantly, top sales award winner every year. I was able to take non producing sales people and move them into club winner's in the first 12 months. I dedicated a lot of time and effort to hitting the number that we hit and the new comp model is totally deflating. I do not understand the logic behind this comp model. I would absolutely make more money individually if I stepped down from the sales leader role and solely focused on my own production and ignored all of the other sales people in my office/on my team.

What would you do in this situation?

stay? go? renegotiate?

🍾 Commission

9

21 comment

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unclespacejam

Politicker

7

ur dad’s brother

Capping earnings/ commissions/ bonuses is a supremely stupid decision on their part. If you intend to stay in a leadership role I would highly recommend pushing back on this.

Instead of capping commissions, just put guardrails on the % payout. Obv keep it competitive but there’s no sense cutting into profitability by letting the % payout get out of control. But in principle a cap is never going to achieve the positive outcome on profitability they’re looking for.

Better to leave uncapped, and allow the team turn to continue earning more if they bring in more. The incentives are aligned. Everyone wins.

Sunbunny31

Politicker

5

Sr Sales Executive 🐰

All of this. Capping incentives absolutely ruins morale. Keeping execs happy with guardrails is brilliant. Win/win.

AGuyInSales

Fire Starter

4

Area Sales Leader

Can you give an example of guardrails?

unclespacejam

Politicker

7

ur dad’s brother

Say the base payout % from 0-100% of target is 10% payout, then you get 12.5% up to 150% and 15% up to 200%

But the max is 15%

AGuyInSales

Fire Starter

2

Area Sales Leader

Thank you for the suggestions and help!

Sunbunny31

Politicker

3

Sr Sales Executive 🐰

He’s right - incentivize sales, reward performance, keep paying out - but be clear on the tiers and % payout.

unclespacejam

Politicker

5

ur dad’s brother

And for bonus points: make the plan simple enough that your reps could do rough “back of the napkin math” to estimate their earnings.

We’re sales people, we’re inherently curious people, who get thrill from “gaming the system” just ensure you align that with company direction.

Giving your reps the feeling of winning is great but if you can stack that feeling on top of them knowing that their contributions are meaningful and pushing the business in the right direction, they’ll run through a goddamn wall for you.

jefe

Arsonist

2

🍁

@unclespacejam hit it out of the park here. Good thing the Dome was down or he'd have put a hole through it.

unclespacejam

Politicker

2

ur dad’s brother

Just goin mark McGuire on that shit hittin dingers

sketchysales

Politicker

2

Sales Manager

Uncle is on the money here. Capping commission will cap sales at the max commission level and just hampers everyone. Guardrails mean the sales team still win and go for it and leadership are essentially capping the commission at set levels but still giving the runway to push beyond the targets.

oldcloser

Arsonist

4

💀

What you’re experiencing is fairly common for a team production number that far exceeded expectations. I’ve been there. Sometimes it comes at you the way you just got it.

I’ve gotten it straight from the CEO like this: “Great job last year. Had you asked me if I would be happy to pay you what you made last year with this kind of performance, the answer would have been yes. But there’s no way I can continue to pay you this much.”

Hazards of high performance in leadership. And there’s no way you were going to sandbag it either. So, my take? Your decision all depends on your personal motivation. If you’re looking to be a 10M to 100M VP sales, this sounds like it’s ripe for you. Stay right where you are and know you’re just building a story to parlay into a high 6-fig role.

If that doesn’t suit you and it’s only about money this year, leverage it. Tell them they can pound sand if they expect you to manage this much for that pay. Gimme my IC status back. That play will resonate.

Good luck whatever you decide and congrats on last year.

AGuyInSales

Fire Starter

3

Area Sales Leader

The exact words from my direct boss who crafted the original comp model: “I never could have imagined that your team would have sold this much ever”. It was utter shock and with it, almost a level of sickness that he had to pay out on the model. The new model significantly reduces and caps the bonus structure almost like, “hey, this is all I really want you to be able to earn/think it’s worth”. If I neglect the team and focus on my success only I could double or triple the new bonus cap in personal commissions. I like the idea above on proposing a tiered model as the sales number increases the % bonus increases as well. Without sounding like an ungrateful asshole, how do I say that in this new model, I ’m giving up income to be the sales leader, which is more challenging and it would be easier and more lucrative to step down with this new company model? My ultimate goal would be to be the sales leader and ascend into a larger role: state, regional, national. Appreciate your thoughtful response above.

oldcloser

Arsonist

4

💀

This is just one of those shitball deals. I totally relate and empathize, both. Having been there, I’ve chose to keep the seat, knowing there is no way I could have gone backwards. I startedto crave the wins where I got “Hey, thanks boss. It’s because you taught me how to X that I was able to get this done.” I still crave them.

The real brain twist is that nobody ever got into sales because of altruistic aspirations. Then, you find value in growing people and companies simultaneously. I don’t need to tell you the people part is a different skill set entirely. So, you are absolutely at an inflection point. Your decision here is critically related to your future. Here’s my advice if you want it:

Stay on your career track. Keep your skills current. Keep your reputation immaculate. Work your ass off with an employee and customer satisfaction obsession.

What you build with people will follow you for the rest of your career. I promise you, I am living evidence of this. The sacrifice you make from this years income is an investment in a bullet proof future.

Pachacuti

Politicker

3

They call me Daddy, Sales Daddy

The one thing you can expect when you blow out your quota and make a ton of money is that the powers that be will make it so you can NEVER do it again. Congrats!

AGuyInSales

Fire Starter

2

Area Sales Leader

Ha!

Beans

Big Shot

1

Enterprise Account Executive

Any answer as to why the cap?

AGuyInSales

Fire Starter

1

Area Sales Leader

I haven’t had my follow up conversation yet but I intend to ask as part of the next conversation.

CuriousFox

WR Officer

0

🦊

👀🍿

Justatitle

Big Shot

0

Account Executive

Have you brought your case before the DM's that changed the policy and said something to the effect "I understand that we over-delivered on expectations last year, the goal is to over-deliver every year, if I am presented with an unrealistic number or being throttled on pay there is a sense that I am being punished for doing well. can we discuss how to make this realistic and allow me to continue to be highly motivated to do well here?"

AGuyInSales

Fire Starter

1

Area Sales Leader

This is the message I really want to craft. I struggle with sounding greedy or ungrateful but also want it to be a win/win comp plan so that we all benefit from the structure. I like the way you worded this message.

Justatitle

Big Shot

1

Account Executive

Are companies greedy for being for profit??? You are employed at a for-profit business, if you don't produce you get canned, conversely, if you produce well you should be paid well. SImple.

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