Sales Commission Plan

Sales Commission Plan

Create competitive sales compensation structures.

Prompt Template

Design a sales commission plan for:

**Role:** [SDR/AE/AM/Sales Manager]
**Target OTE:** [On-target earnings]
**Base/Variable Split:** [60/40, 50/50, etc.]
**Quota Type:** [Revenue/Meetings/Pipeline]
**Sales Cycle:** [Average deal time]
**ACV Range:** [Deal sizes]

**Business Goals:**
- Primary metric: [What to optimize]
- Secondary metrics: [Other important factors]
- Behaviors to encourage: [Specific actions]

Generate:
1. Compensation structure overview
2. Commission rate tiers
3. Bonus/accelerator structure
4. Clawback provisions
5. Example scenarios at different performance levels

Compensation Components

Base Salary

• Provides stability
• Typically 50-70% of OTE
• Based on market rate and experience

Variable Compensation

• Tied to performance
• Motivates achievement
• Typically 30-50% of OTE

Commission Structures

Linear: Same rate for all sales
Tiered: Increasing rates at thresholds
Accelerator: Higher rates above quota
Decelerator: Lower rates below threshold

Example: Account Executive Plan

OTE: $150,000
Base: $75,000 (50%)
Variable: $75,000 (50%)

Quota: $1,000,000 annually

Commission Structure:

Performance	Rate	Payout
0-80%	5%	$0-40K
80-100%	7.5%	$40K-75K
100-120%	10%	$75K-95K
120%+	12%	$95K+

Accelerators:

• Multi-year deals: +1% bonus
• New logo: +$500 spiff
• Strategic product: +2% on product revenue

Example Scenarios:

• 80% quota ($800K): $75K base + $40K commission = $115K
• 100% quota ($1M): $75K base + $75K commission = $150K
• 120% quota ($1.2M): $75K base + $95K commission = $170K

SDR Plan Example

OTE: $75,000
Base: $50,000 (67%)
Variable: $25,000 (33%)

Monthly Quota: 15 qualified meetings

Payout:

• Per meeting: $100
• Tier bonus at 15: $500
• Stretch bonus at 20: $1,000 additional