*** Warning: this turned into a longish post ***
I started with a series A SaaS startup in January and recently received my comp plan for the 1H of this year (the company is doing 6 month comp plans though I'm not sure what this means). The VP Sales is also new, I know him well and I deliberately didn't press too hard for a lot of detail in the offer as I knew a lot of stuff was being figured out, but I trusted that he'd do right by me. What we did agree upon was a 50/50 package and that I'd have a 6 month ramp (no quota for 1H). We also agreed that I'd be paid my variable comp for the first 6 months and that my 2H quota would be $500K. My territory is a brand new for the company and sales cycles are 6 months plus, so I wanted to ensure I had something more than my base salary for the first 6 months.
I live outside the US and have been hired via a PEO. I have an employment contract (not the US style offer letter) and when this arrived, there was no mention of my variable comp. It detailed my base salary but there was no detail about variable - only that this is something that would be communicated to be separately. I queried this with the VP HR and was told that the VP Sales would send me the details.
A couple of weeks later I received an email from the VP Sales with my "comp plan". It showed a quota as being "N/A" and also included a comp rate which it said was "above draw payout". I had started to receive my full monthly base + variable and understood that the commission rate that was "above draw payout" was an incentive for me to close something in 1H and be paid commission that exceeded my agreed upon variable pay as there's a big push, company-wide to secure 1H ARR.
After that I put my head down and have been working really hard building pipeline, developing partnerships & figuring out how to spot a good opportunity for this product as it's so new in the market. Recently I received a comp plan in DocuSign that the company wants me to sign. Alarm bells went off when I read that the draw was "recoverable". I queried this as my understanding was that I would be paid what was effectively guaranteed commission for 1H. What I was told makes no sense to me...
Apparently the payments that were made to me in 1H are recoverable. What this means is that if I achieve my 2H target, my variable earnings will "pay back" the recoverable draw that was paid to me in 1H and I will be paid nothing. So if am to finish the year at 100% of my year's target ($500K), I will earn exactly half of my year's variable pay. In order for me to earn the other half of my variable I'll have to close another $300-400K depending on what kind of accelerator is in the 2H plan.
This seems crazy to me. I've always worked under the premise that if you hit 100% of your target, you earn 100% of your variable. Effectively my quota for the year is between $800-900K, not $500K which is a big difference.
Is my understanding of all this correct? VP Sales and I have had several conversations but he doesn't understand my point of view. It's reached the point where I'm having sleepless nights (it's 2am here now) and my wife and I are talking about cancelling summer vacation plans and camps we've booked for the kids as half of my expected variable pay has evaporated.
Points of view & opinions greatly appreciated.
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