Figuring out compensation OTE help plz

So I had an interview today with a non tech company- they sell concierge membership (access to their services) to high net worth individuals ($100M +). I would also be the first sales hire and title is head of sales but ill be a one person sales team for now.


closes can take anywhere from 1-75 days and her quota for the year for me would be $4.5M but she said 125k base + 125k OTE = $250k


I believe the math does not add up. were gonna have a second call later this week to discuss an appropriate compensation plan.


I would love all tips/metrics/math you would use to calculate this compensation.


edit: company has $3M ARR. its based on founders past track record. What is the normal % of commission? For a quota this high what is an appropriate comp split?

💰 Compensation
🍾 Commission
13
NoToBANT
Valued Contributor
7
Senior Account Executive
So a few things here:
1) they have an ARR of $3m, but are expecting you to add a further $4.5m a year? Fucking mentalllllll
2) your Sales: Commission is working out at 2.78% which is honestly the most random number
3) in order to answer how much you SHOULD be getting paid, you need to know COGS and Gross Profit Margins
4) $125k base against a $4.5m target is unreasonably, stupidly low - in any industry
5) do they have a list of people to prospect?? If not, how do they expect you to find individuals with a $100m Net Worth, when this information is NOT publicly available
6) you need to find out, to get to the $3m ARR they’re on right now - what is meeting: opps: close ratio (my suspicion is that it’s fairly low and therefore you’ll run out of TAM before you can hit target or your close ratio will have to be in high 70/80%

TLDR: I think they’re taking you for a mug, but dependent on a few factors, it may be worth with a slight increase in base and OTW
hola
Valued Contributor
3
sales consultant
THank you and I agree. I will def go ahead and ask these questions.
sleepingjaguar
Opinionated
0
CSM, Emerging Markets
Being the first sales hire you have to understand the financials of the business. If they don’t share or are dodgey run. The questions above are great but I would argue understanding the target audience and PMF is paramount in going into this with your eyes open <—-in addition to what the other user said too
jefe
Arsonist
2
🍁
REALLY good questions here.

Personally, I wouldn't pursue this opp.
medhardwaredr
Opinionated
5
Director of Sales NA
125k base + 125k commission total if you sell $4.5m = 250k OTE (on target earnings). Not quite sure what you’re asking other than that
poweredbycaffeine
WR Lieutenant
5
☕️
Are you a high net worth individual or can you present yourself as such? The wealthy buy from the wealthy…or do wealthy-passing. Check that as a pre-req (not meant as an insult).
poweredbycaffeine
WR Lieutenant
3
☕️
I can see the downvotes. Please hate me for illuminating reality. It’s better than coming up way short for having no report with your ICP.
jefe
Arsonist
1
🍁
Not sure why anyone would downvote that...
coletrain
Politicker
4
Account Executive
How do they know closes take 1-75 days if you would be the first salesperson? Seems odd
4
Founding BDR
Don’t have any experience with this level of comp but the $4M quota while the company’s ARR is $3.5M is skeeeetchy
oldcloser
Arsonist
3
💀
… woohooo … and no commission caps either, huh. Not sure how this makes any sense. Not sure it makes none either. It really seems out of the air. Like “we need a quality seller who can articulate to rich folk. They cost $250k, I think.”

Agreeing with the masses here. 1.5X all time rev in a year is borderline psychosis.
poweredbycaffeine
WR Lieutenant
2
☕️
Dude. It makes no sense to hire someone into this role to do that multiple alone. Especially if they have to ask this question. Founding AEs have VP intellect but lack the experience.
hola
Valued Contributor
1
sales consultant
As it’s too low or impossible to do?
oldcloser
Arsonist
0
💀
It is a ridiculously ginormous ask. Unless the founders did what they did working part time, yeah, impossible.
braintank
Politicker
2
Enterprise Account Executive
Do they have any customers?
Pachacuti
Politicker
2
They call me Daddy, Sales Daddy
Not sure what you're asking.... you didn't mention a %, but at plan you're making ~2.7% commission on each sale. I don't know if that is good or not in that niche, but that's the math behind it.
unclespacejam
Politicker
2
ur dad’s brother
This might be more believable if they were proposing you get them from $3M to $4.5M in one year. But going 1.5X revenue in your first year doesn’t make any goddamn sense.

Would strongly assume this person is either out of their depth or there are several typos in the JD
Phillip_J_Fry
Opinionated
0
Director of Revenue
All of this this is just red flags followed by more red flags
Sharkismyspiritanimal
Good Citizen
0
Sr Account Executive, Enterprise Software
Run 🏃
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