#compensation

Handle commission conflicts fairly. Common disputes: 1. Split credit (two reps claim same deal). 2. Deal attribution (inbound vs. outbound claimed). 3. Clawback timing (customer churned, commission retracted). 4. Rule interpretation (new comp plan unclear). Resolution process: 1. Rep submits written dispute with evidence (CRM notes, emails, timestamps). 2. Sales ops reviews within 3 business days. 3. Gather facts: CRM history, manager input, email trail. 4. Compare to comp plan terms. 5. Make decision with rationale. 6. Communicate outcome with explanation. 7. Escalation path if unresolved (VP Sales). Prevention: 1. Crystal-clear comp plan documentation. 2. Lead routing rules documented. 3. Split rules defined upfront (50-50 for equal contribution, 70-30 if lopsided). 4. Clawback terms clarified (typically 90-day window). 5. Regular comp plan training. Manager involvement: mediate before escalation. Transparency builds trust.

Manage equity and cap table. Considerations: 1. Founder vesting (4-year, 1-year cliff). 2. Employee stock options (ISOs vs NSOs). 3. Option pool size (10-20% pre-funding). 4. Strike price and 409A valuation. 5. Equity grants for key hires. 6. Dilution from funding rounds. 7. Secondary sales policies. 8. Cap table modeling. Use Carta or similar. Keep equity competitive but not excessive. Refresh grants for retention.

Set fair, achievable, stretching quotas. Inputs: 1. Company revenue goal. 2. Number of reps. 3. Historical attainment (what % hit quota). 4. Market capacity (total addressable market, saturation). 5. Sales cycle length. 6. Average deal size. Bottom-up calculation: Company needs $10M revenue. Reps: 10. Individual quota: $1M each (100% coverage). Add buffer for 80% attainment: $1M ÷ 0.8 = $1.25M quota per rep. Ramping: new reps 0% month 1-2, 50% month 3, 75% month 4, 100% month 5+. Segmentation: enterprise reps higher quotas ($2M), SMB reps lower ($750k). Validation: sanity check with outside data (SaaS benchmarks show similar company size has $1-1.5M quotas). Adjustments: ramp-up time, territory quality, available leads. Review quarterly: if <60% hitting quota, quotas too high. If >90% hitting, quotas too low. Sweet spot: 60-70% attainment rate. Communicate transparently: show math, rationale, FAQ doc.

Design motivation-driving compensation structure. Components: Base salary (40-50% of OTE), Variable commission (50-60% of OTE). Tiers: 0-70% quota: 8% commission. 70-100% quota: 10% commission (standard rate). 100-120% quota: 15% commission (accelerator). 120%+ quota: 20% commission (super accelerator). Example: $100k OTE, $50k base, $600k quota. At 100% quota: $50k base + $60k commission (10% of $600k) = $110k. At 120% quota: $50k base + 12k (0-70%) + 18k (70-100%) + 21.6k (100-120%) = $101.6k. Add SPIFs for strategic goals. Pay monthly or quarterly. Include clawback clauses. Review annually.