The War Room

Should you base a sales person salary at ?X their target?

Recently I was offered a job which was 50/50, but also worked out to be exactly 4x of what my target would have been? It was a SaaS company and considering I already work for one I thought this was a different way of looking at someone salary rather than experience and previous results. For me it doesn't work but would be interested to know if people have seen similar offers?

πŸ’° Compensation
☁️ Software Tech
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Chief Revenue Officer
I think your target is relative really?Β  I'd take a 4x target with a company that has a strong market presence, heavily funded lead generation/marketing team, and a killer product over one that had the opposite?Β Β 

Things I look out for which are red flags for me in perusing new jobs/opportunitiesΒ  1) is the base salary low, and the "OTE" high.Β  2) is the compensation plan "bonus" heavy (ie, bonuses for achieving goals and milestones 3) is there a minimum "buy-in" to get paid that's way too high (my first gig had a 90% quota achievement buy in to get commission).Β Β 
Director of Sales
Yes, that’s normally how targets are worked out, but every company and every bracket(SMB, Corporate, Enterprise) will have their own ratios.Β 

it should be worked out by realistic productivity ie how much can a rep actually sell, ramp time and actual quota attainment.Β 

for e.g. if a rep is paid Β£70k at enterprise level with a sales cycle of 6 months+ might have have a taget of Β£700k so 10% salary to target ratio, but other companies might do it at 7% which would put the target at Β£1m.Β 

Hope that makes sense
Enterprise Account Executive
Yes makes sense. Probably to be clearer the information the company gave me is they have this set for everyone the same across the whole sales company, so if you wanted to increase your base/OTE you would have to take a higher target, My feeling is having this set across the company for everyone is fine if all things are equal, eg. Territory, Enterprise Accounts etc. But very rarely it is and where you have experienced reps potentially working a new territory, surely this will mean the experienced will just leave in the end as it seems the company are not taking into account outside factors. Also becomes a bigger problem for recruiting those positions if, in fact, your percentage end up being below market value which USA to the UK to the Middle East is all very different.
Account Executive
I have read that as a rule of thumb in SaaS targets should be 4/5X of the reps OTE to make sense from an overall business perspective for the vendor.
This of course varies a lot. I've been in places where it was 2.5X and others where it was 6X.
I guess it depends on the overall OPEX costs of the business model
Can you negotiate commission increases instead of base salary?
What's a good base and ote for an SDR?
Is $220K OTE Reasonable for someone with less than 5 years sales experience?