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SaaS_Dude_NYC

Strategic Account Executive

Contributor
Fire Starter

Strategic AE Comp Plan - Fair?

Hey all! Would love to hear some opinions on some specifics around my current comp plan. For reference, I'm 12+ years experienced year Strategic AE, SaaS Sales, Martech (SaaS + associated professional services)


OTE - $275K 50/50 (I'm going to be pushing for $300k this year based on quota increase below)


  • My quota was just raised from $1.8M to $3.1M, I have 2 large renewals coming off 3-year deals that I didn't originally sell that are close to $1M combined
  • The main portion I would love to hear opinions on is below:
  • We have a yearly quota, but payment is ramped
  • No commission payment until you hit 40% of the quota
  • At 40% of quota, you are paid 25% on your variable comp
  • From 40% on you are paid at 125% so that you break even at 100% and then continue to earn 125% over goal
  • Payment is made quarterly (once hitting greater than 40%) during 2nd month in next quarter
  • My issue here is that I'm working on strategic accounts that are taking 6 - 14 months to close. For example, just landing Verizon, $1.2M landed but 15 months of work.
  • This model makes more sense with team members closing frequent mid-market deals where the revenue is more consistent IMO.

Would love to hear your thoughts, I plan to propose some different models such as receiving payment upon invoicing or even changing the comp percentage on pure ARR vs professional services.


Thanks!

☁️ Software Tech
💰 Compensation
14

29 comments

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TennisandSales
Politicker
6
Head Of Sales
i would love to hear how successful you are on getting them to change the comp plan.

this is not an uncommon comp plan but def NOT what me or many sales ppl would like.

I also agree with you that the model makes sense if you are closing smaller deals and close more deals in a year.

but if one deal puts you at like 45-50% to plan than the decelerator doesnt really effect you.
justatopproducer
Politicker
1
VP OF SALES -US
Zero percent. But always has been worthwhile to ask for further explanation to help back into the numbers and your plan for success
SaaS_Dude_NYC
Contributor
1
Strategic Account Executive
"but if one deal puts you at like 45-50% to plan than the decelerator doesnt really effect you."
The decelerator doesn't as much but the 40% cliff does. Let's say I close a deal this quarter at $1M. I would be under 40% of my total quota and therefore not eligible for any commission yet. If I do then break the 40% in Q2, I wouldn't get paid any commission until the 2nd month of the following quarter. So now my 1st commission paycheck hits mid-August. See how that can compound if my next large deal doesn't close until Q3
SaaS_Dude_NYC
Contributor
0
Strategic Account Executive
Thanks! I've surely never had a decelerator quite like this, I'm sure it is out there but it's not very motivating, especially first couple of quarters of the year.
Maximas
Tycoon
0
Senior Sales Executive
I second this!
braintank
Politicker
6
Enterprise Account Executive
I hate complex comp plans
detectivegibbles
Politicker
2
Sales Director
Comp plans like this make my head hurt. I'm also stupid.
Sunbunny31
Politicker
1
Sr Sales Executive 🐰
Somehow I doubt that.
detectivegibbles
Politicker
2
Sales Director
"Im just a simpleeeeee, kind of man"
Sunbunny31
Politicker
1
Sr Sales Executive 🐰
I heard that.
DungeonsNDemos
Big Shot
0
Rolling 20's all day
yeah but how else can you live in the unknown lol. Keep life a mystery!
Justatitle
Big Shot
5
Account Executive
They upped your quota by 80% and are not willing to increase comp? that certainly does not seem to be aligned.
unclespacejam
Politicker
4
ur dad’s brother
Agree here. I’d try and fight for an hefty increase in base at the very least. Considering you’re a strategic AE it wouldn’t be outside normal to see $350K OTE at a 50/50 split
SaaS_Dude_NYC
Contributor
1
Strategic Account Executive
Right, a bit crazy. They didn't offer but I also haven't asked yet. However, this is the first time I've been in a true hybrid role New New/Account management with renewals. I adopted 2 accounts when I started that were in 3-year deals both coming up in '23. The total between the 2 could be about $1M, so they have made a major increase in my goal partially based on that, in addition to other pipeline I've developed that has taken a while.
Is that common practice in hybrid roles to fluctuate a goal that much based on renewal potential?
Justatitle
Big Shot
1
Account Executive
typically in a renewal role they take the book of business in your name and add a growth percentage target to it. So it is likely funky since you have both responsibilities. They're also saving money by not hiring a dedicated AM for the role FWIW.
SaaS_Dude_NYC
Contributor
1
Strategic Account Executive
Yup, that's how our team operated when I was in pure AM role, and for a small team I oversaw. It's def interesting to be truly hybrid, and they are absolutely saving money not to have dedicated AM's. I think there should be a balance of the renewals impacting my quota , but with an opportunity to make some real money on them, not driving a goal increase almost 1:1 the pipeline revenue amount of the renewals.
CuriousFox
WR Officer
4
🦊
I think I'd look for a new job.
antiASKHOLE
Tycoon
2
Bravado's Resident Asshole
Go for it! Those who do not ask, do not receive.
Sunbunny31
Politicker
2
Sr Sales Executive 🐰
Ouch. Is your company having money problems? Sounds like they're hanging onto every last penny as long as they can. Paid quarterly? Not paid at all until 40% (1.2 million)?
Honestly it sounds like they are trying to get volunteers for leaving by making a comp plan and commission structure as noxious as possible.
You can certainly try to renegotiate this, but if you're working for a larger tech company, I'm not optimistic for your chances.
SaaS_Dude_NYC
Contributor
1
Strategic Account Executive
Thanks SunB. They designed this comp plan in the pretty early stages when, I'm sure, cash flow was tight. We've now gone public in the Tel Aviv exchange and should be profitable this year so I think it's time they update this plan before we update our resumes :)
Sunbunny31
Politicker
1
Sr Sales Executive 🐰
Definitely worth visiting with them for sure. Also the move to $300K (if not more).
Best of luck!
detectivegibbles
Politicker
2
Sales Director
I understand the economics behind them but why risk losing top performers when you fuck with comp this much?

Why make shit complicated when it doesn't need to be?
SaaS_Dude_NYC
Contributor
1
Strategic Account Executive
TBH, they have gotten pretty far with a couple of reps that didn't have much experience so they just accepted the plan and were probably crushing it based on the amount of revenue flowing in. Now we are scaling and there are new top performers that have experience with much better comp plans
BestCase
Valued Contributor
2
Account Executive
The one aspect of this I would negotiate is how is commission "earned" vs how it's "paid." If you leave the company (laid off, plan'd off or quit) do they owe you for contracts signed before your departure date?
If not explicitly stated in your contract, you leave opportunity for them to keep your money.
justatopproducer
Politicker
0
VP OF SALES -US
If you don’t believe it is ask for it to be broken down as to how they came to the number. This can be useful on targeting accounts and uncovering any bs
SaaS_Dude_NYC
Contributor
0
Strategic Account Executive
Thanks! I've actually already reviewed this with them, they just made the number closer to my full pipeline than expected. The larger issue I have is how much the variable comp is at this quota number and in the structure it is paid out. I plan to have a discussion with them on Friday, will try and update everyone!
SaaS_Dude_NYC
Contributor
0
Strategic Account Executive
Here is the visual for reference if my description wasn't clear. Most of our Enterprise reps do not get their 1st paycheck until mid-August
DeLaTommy
Executive
0
Enterprise Account Executive
4.4% commission rate is super low. 8-10% is ideal. Are you selling just professional services? If you see a path to hitting your number, might as well knock it out early, then find another job where you can get ~$350k OTE
kelvin26
Fire Starter
-2
administrative manager
https://timebrookinvestment.com/u/sign_up?r=kryptotitan


https://t.me/+L_3GDbXlz904MDg0

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