How should sales compensation and quotas be structured?

AJ Tennant · Oct 23, 2024

The single best change to a sales comp plan is more aggressive accelerators above quota

Accelerators reward the very top performers, across CSMs, BDRs and AEs

31:30 20Sales: Biggest Lessons Scaling Slack from $6M to $1BN in ARR | How to Build a Customer Success Machine and Where Most Go Wrong | The Framework to Hire All Sales Reps: Take-Home Assignments, Hiring Panels and more with AJ Tennant @ Glean

Carles Reina · Apr 11, 2026

Commissions should be uncapped with accelerators — signing a million-dollar commission check is a no-brainer good outcome

Every million in revenue a person signs creates a multiple of that in extra company valuation, so the payout benefits shareholders and the whole company; engineers get the equivalent through equity appreciation instead of commission

Scope: applies to anyone who sources revenue — SDR, AE, CSM, or an engineer

10:25 20Sales: ElevenLabs: Why We Set a 20x Sales Quota | How to Structure Sales Compensation Plans | Customer Success: 'Total BS' or Growth Engine? | Building an AI Sales Machine: What Tools & Tactics Must CROs Adopt Today with Carles Reina

Carles Reina · Apr 11, 2026

A fair accelerator structure is a 5% base commission on everything sold, with an additional 25% commission uplift for each additional increment beyond quota

Scope: 'it depends' — this is how ElevenLabs does it

11:43 20Sales: ElevenLabs: Why We Set a 20x Sales Quota | How to Structure Sales Compensation Plans | Customer Success: 'Total BS' or Growth Engine? | Building an AI Sales Machine: What Tools & Tactics Must CROs Adopt Today with Carles Reina

Becca Lindquist · May 2, 2026

Sales comp plans should be heavily weighted toward over-performance, with a quota-to-OTE ratio around 7.5x

If you give a rep a big quota and they hit 110% of it, they should be making good money

0:00 20VC: Inside Clay's Sales Playbook Scaling to $100M ARR | How to Set Sales Comp Plans | How to Read Sales Talent Linkedin Profiles | What Profiles to Hire & Fire | How to Increase Performance and Speed in Sales Teams with Becca Lindquist

Becca Lindquist · May 2, 2026

Accelerators should be heavily weighted toward over-performance so that reps hitting 110-150% of a big quota make very good money.

If you're giving reps a big quota, overachievement has to pay meaningfully; the key design question is what attainment percentage gets a rep to a million dollars.

Scope: describes it as an argument still being worked out internally with RevOps and finance

32:58 20VC: Inside Clay's Sales Playbook Scaling to $100M ARR | How to Set Sales Comp Plans | How to Read Sales Talent Linkedin Profiles | What Profiles to Hire & Fire | How to Increase Performance and Speed in Sales Teams with Becca Lindquist

Mark Goldberger · Apr 19, 2023

Founders wrongly think about early sales hires only in cash compensation terms; equity should be a much larger part of the package for salespeople.

A 10x salesperson can put an entire team or company on their back and see the impact of their revenue on everything up to fundraising, so you want to reward them and get them bought into the long-term vision, not just coin-operated.

Scope: applies especially to early sales hires

33:50 20Sales: Why You Should Never Hire a VP Sales First, How To Create Urgency in a Sales Process, How to Do Traditional Outbound 10x Better, Why Revenue Doesn't Matter with Your First Customers | Mark Goldberger, Head of Enterprise Sales @ Ramp

Sam Blond · Apr 12, 2024 · hedged

Early sales comp should be set by anchoring on the revenue you expect a rep to generate at maturity and then negotiating against the candidate's expectations, trading lower cash for more equity; AE total comp ranges roughly $100K–$250K and is not one size fits all.

What you can afford to pay follows from the ARR a rep can close at maturity, and early-stage companies can compensate for lower cash with equity.

Scope: ballpark figures; wide range based on many factors

26:16 20Sales: The Biggest Sales Lessons Scaling Brex to $400M ARR, Why Startups are Doing Outbound Wrong and How to Fix It & Why Demand Gen is the Bottleneck for all Startups and How to Solve it with Sam Blond, Former CRO @ Brex

Dan Fougere · Nov 22, 2024

For salespeople the real money is in equity, not comp or commission checks.

Across his five startups he took more and more of his compensation from the value he created in the company; small gains compound like a game of inches.

22:23 20Sales: What I Learned Scaling Datadog from $60M to $1BN in ARR | How to do Outbound in 2024 | Why Discounting is Dangerous and Contract Sizes are Misleading with Dan Fougere

Kim Graves · Jun 27, 2025

Early in a sales career it is a big miss to focus on comp rather than the full package including equity, because at a fast-growing company equity will be far more meaningful than OTE

At a fast growing company that's doing really well, equity outweighs cash compensation

Scope: depends on career stage; most true early in one's career; assumes the company is growing fast and doing well

28:39 20Sales: How to Layer Enterprise Sales on PLG | How to Sell AI Tools To Enterprises That Are Scared | Should Reps Own Their Own Pipeline | Mistakes All Founders Make When Moving From Founder-Led to Rep-Led Sales with Kim Graves

Harry Stebbings · May 23, 2026

Not tying compensation to performance is a mistake, even at the famous big-name companies that have done it

There is no point to compensation that isn't tied to performance

21:23 20Sales: The $100M CRO Bubble: Why Anthropic Are Causing a Comp Crisis | Why You Should Never Hire From Salesforce or Service Now | How to Hire, Train and Forecase in a World of AI with Chad Peets and Chris Degnan

Chad Peets · May 23, 2026

Sales organizations without quotas are ludicrous and unworkable because there is no way to hold anyone accountable when the top performer and the non-performer earn the same

If you sell far more than a peer and get paid identically, the loser is happy doing nothing and the performer is being exploited — that's socialism and it does not work

21:30 20Sales: The $100M CRO Bubble: Why Anthropic Are Causing a Comp Crisis | Why You Should Never Hire From Salesforce or Service Now | How to Hire, Train and Forecase in a World of AI with Chad Peets and Chris Degnan

Chad Peets · May 23, 2026

Anthropic's group quota structure shows they value having a lot of salespeople rather than quality salespeople, so the best performer gets paid like the worst

Under a group quota, individual performance isn't rewarded, which destroys the meritocracy salespeople are motivated by

24:56 20Sales: The $100M CRO Bubble: Why Anthropic Are Causing a Comp Crisis | Why You Should Never Hire From Salesforce or Service Now | How to Hire, Train and Forecase in a World of AI with Chad Peets and Chris Degnan

Jeetu Mahtani · Sep 27, 2024

Sales comp plans should evolve with the company's phase of growth — indexed to raw acquisition velocity early, then weighted toward retention, cross-sell and upsell at scale

A comp plan simply drives behaviors; get it wrong and you end up with bad customers, bad behavior and bad culture

34:50 20Sales: Scaling Hubspot from $3M to $1BN in ARR | How to Hire and Ramp Sales Teams | How to Scale Customer Success Successfully | How and When to Go International and Crush It with Jeetu Mahtani

Ron Gabrisko · Aug 4, 2025

As a sales org scales you have to get smarter and more sophisticated about commission spend, modeling how many reps will land at 150% or 200%

With 1,400 reps and 5,000 people in sales there's a real commission budget to hit, unlike when you only had 20 people

36:44 20Sales: $0-$3.7BN: The Databricks CRO's Playbook to Build the Fastest GTM Engine in SaaS History | How Databricks Beat Snowflake | How To Build a Sales Org of 5,000 and Close $190M Deals with Ron Gabrisko

Shaunt Voskanian · Mar 21, 2026

Quota should be set as a philosophy about what work needs to be done and how much reward that work deserves, and it should evolve with the business

There is no single right quota philosophy; Figma's own approach has evolved as the job-to-be-done changed from supporting customers for viral expansion to strategic selling

Scope: depends on the population of people who can do the job

22:21 20Sales: Inside Figma's $1BN ARR Revenue Machine | Why We Do Not Have Customer Success or SDRs | Why I Do Not Believe in Sales Quotas with Shaunt Voskanian, CRO @ Figma

Kyle Norton · May 30, 2025

Founders building an outbound team should overpay for a genuinely good BDR and offer a clear path to account executive

Many companies are stagnant and hold good BDRs who have no path to AE where they are, so comp plus progression wins them

Scope: generic advice; the right answer depends on market and goals

24:14 20Sales: From $2M ARR to $40M ARR: The Playbook | How to Use AI To Supercharge Your Sales Team | Why Pipeline Reviews are BS | The Sales Call Script that Closes 99% of Prospects and How to Hire the Best Sales Reps with Kyle Norton, CRO @ Owner

Kyle Norton · May 30, 2025 · hedged

$80k for a BDR is not bad comp if you hire high-caliber young people, train them heavily, and give them a path to $100-150k within two years

At that point in a 22-year-old's career the package plus the progression path is a great deal, and they are the future leaders of the company and industry

Scope: requires investing a lot in training

27:47 20Sales: From $2M ARR to $40M ARR: The Playbook | How to Use AI To Supercharge Your Sales Team | Why Pipeline Reviews are BS | The Sales Call Script that Closes 99% of Prospects and How to Hire the Best Sales Reps with Kyle Norton, CRO @ Owner

Ron Gabrisko · Aug 4, 2025

In the early days you must ensure reps blow out their numbers and earn huge money, because that becomes your best recruiting engine

Joining a low-revenue company requires a leap of faith, and the best candidates ask whether anyone has made a million dollars and want to meet them to judge if it's replicable

Scope: early days specifically

35:49 20Sales: $0-$3.7BN: The Databricks CRO's Playbook to Build the Fastest GTM Engine in SaaS History | How Databricks Beat Snowflake | How To Build a Sales Org of 5,000 and Close $190M Deals with Ron Gabrisko

Jeanne DeWitt Grosser · Mar 9, 2022

Early sales orgs should start with team-based quotas and lower compensation leverage, ramping into individual quotas and higher leverage only as you learn what is achievable and replicable

Early on people are still learning, so less should be at risk until you understand what productivity is attainable

Scope: early stage

18:27 20 Sales: The Stripe Sales Playbook; Who Should Create It, When Should it Be Done, Where Do Many Go Wrong | How To Identify 10x Sales Hires and How To Structure the Hiring Process in Sales with Jeanne DeWitt Grosser, Head of Americas Revenue & Growth @ St

Julian Teixeira · Mar 7, 2025

Early-stage sales teams should start with team goals rather than individual quotas, using spiffs to discover rep capacity.

Without historicals on how many deals a rep can close at what value, you need to establish an 'in it together' footing while finding where the back wall is.

Scope: works only for a very short period; based on Lightspeed and 1Password experience

9:51 20Sales: Everything You Know About Sales Playbooks is Wrong | How to Hire and Train Your First Sales Hires | How to Crush Pipeline and Deal Reviews as a Team | How to Structure Sales Teams and Sales Comp Plans with Julian Teixeira, CRO @ 1Password

Julian Teixeira · Mar 7, 2025 · hedged

Team goals coexist with individual measurement — the team goal is a payout proxy and momentum device, not a mask for individual performance.

In a small team nobody wants to be the one dragging everyone else behind, and a shared company goal stops people criticizing targets while you're still level-setting what overachievement looks like.

Scope: lasts a couple of months to six or seven months; may not work everywhere; based on his last two companies

11:19 20Sales: Everything You Know About Sales Playbooks is Wrong | How to Hire and Train Your First Sales Hires | How to Crush Pipeline and Deal Reviews as a Team | How to Structure Sales Teams and Sales Comp Plans with Julian Teixeira, CRO @ 1Password

Ishan Mukherjee · Apr 4, 2025

Modern businesses will move toward investing only in people with full skin in the game and an owner's mindset — commission-heavy comp rather than fixed salary plus bonus

If you only get your full salary by bringing in revenue, you think like a founder or CEO about putting food on the table

Scope: concedes it is a hard way to operate

19:45 20Sales: How the Best Sales Teams Use AI to Win Enterprise Deals | Sales Teams Will Be Dramatically Smaller | How to Ramps Sales Reps Way Faster | Why Unpaid Design Partners are BS | Why this Generation of Sales is Soft with Ishan Mukherjee @ Rox

Becca Lindquist · May 2, 2026

Paying reps a direct percentage of every dollar closed (e.g. 25%, or 33% on multi-year deals) after clawing back base is the most motivating structure because it aligns rep incentives directly with the company's.

She has never run harder at a goal than when she knew she'd take 25% of every deal she closed; it also created healthy competition and celebration among reps.

Scope: drawn from being one of the first two reps at Heap in ~2015 San Francisco with a ~$60k base

28:55 20VC: Inside Clay's Sales Playbook Scaling to $100M ARR | How to Set Sales Comp Plans | How to Read Sales Talent Linkedin Profiles | What Profiles to Hire & Fire | How to Increase Performance and Speed in Sales Teams with Becca Lindquist

Kyle Norton · May 30, 2025

Sales comp should only pay on downstream outcomes — BDRs paid on closed-won business and AEs paid only when customers go live — rather than on booked demos or signatures

Paying on earlier-stage metrics is gameable; paying on go-live forces high-quality handoffs, good expectation setting and closing quality customers, which matters especially on month-to-month contracts

Scope: their contracts are month to month

28:26 20Sales: From $2M ARR to $40M ARR: The Playbook | How to Use AI To Supercharge Your Sales Team | Why Pipeline Reviews are BS | The Sales Call Script that Closes 99% of Prospects and How to Hire the Best Sales Reps with Kyle Norton, CRO @ Owner

Carles Reina · Apr 11, 2026

Sales reps should not be paid commission on pilots, only on signed yearly or multi-year contracts

A pilot doesn't add to the company's valuation, so no one else — engineers, researchers, ops — gets an equity boost from it; if it doesn't create company value it shouldn't create commission

Scope: do the pilot if needed, then commission on the resulting contract

11:55 20Sales: ElevenLabs: Why We Set a 20x Sales Quota | How to Structure Sales Compensation Plans | Customer Success: 'Total BS' or Growth Engine? | Building an AI Sales Machine: What Tools & Tactics Must CROs Adopt Today with Carles Reina

Lauren Schwartz · Oct 19, 2022

In a consumption business, comp should be tied to product adoption and consumption rather than a traditional bookings quota, because bookings-only variable comp drives reps to land a deal and nothing else.

Compensating on consumption aligns the AE's incentives with the customer's outcomes and with the company's.

Scope: specific to consumption-based businesses

44:06 20 Sales: How To Structure The Interview Process for All Sales Reps, The Must-Ask Questions When Identifying Potential Sales Talent & The 3 Biggest Mistakes Founders Make When Hiring Their First Reps with Lauren Schwartz, VP of Enterprise Sales @ Fivetran

Chad Peets · May 23, 2026

In a consumption model you must tie part of rep compensation to actual consumption, not just bookings, so reps stay invested in the account after the deal

Otherwise reps book a deal, walk away, the account doesn't consume, and the company develops a gross retention problem and overbooked deals

Scope: Most of comp should still be tied to booking events

50:36 20Sales: The $100M CRO Bubble: Why Anthropic Are Causing a Comp Crisis | Why You Should Never Hire From Salesforce or Service Now | How to Hire, Train and Forecase in a World of AI with Chad Peets and Chris Degnan

Chad Peets · Aug 23, 2024

Sales compensation should vary by company based on where the business is weak — e.g. paying a higher commission rate on expansion than on land when the expand motion underperforms

Pulling comp levers redirects rep focus to the motion with the worse sales cycle or deal size

Scope: numbers used are illustrative

22:21 20Sales: How Snowflake Built a Sales Machine | Why You Have to Hire a CRO Pre-Product | Why Most Sales Reps Do Not Perform | Why Hiring Panels are BS in Interviews | Why Remote Sales Reps Do Not Care About Their Development with Chad Peets

Chad Peets · Jan 9, 2026

Comp plan commission rates are the most direct lever for steering rep behavior — shifting a few points between new logo and expansion ACV redirects where reps spend their time

Every tweak drives a different behavior; a rep paid 17% on expansion and 12% on new logo will spend their time on expansion

39:09 20Sales: Why the Best Sales People are F**** in the Head | Why Remote Work is BS | Why Europe is a Nightmare for Recruiting Sales Teams | How to Build a Sales Machine | What Everyone Gets Wrong Today in Sales with Chad Peets

Dave Kellogg · Jan 31, 2024

Upsell credit should be split between sales and CS rather than assigned to one bucket, so that the work flows to whoever is best placed to do it

Assigning upsell to one function creates unnecessary conflict over whose order it is; if you credit both, the enterprise seller happily lets the CSM take the easy 'fries with your burger' add-on and the CSM hands a real cross-sell to the seller, and the compensation math still works

Scope: Dave calls this a minority viewpoint

22:42 20VC: The Metrics That Matter in SaaS Today; Why CaC Payback is Flawed & CAC Ratio is Better, Why You Need to Hire Three Sales Reps at a Time, How to Forecast in 2024 & Biggest Mistakes Made Forecasting & How to Make Customer Success Sell More with Dave K

Carles Reina · Feb 14, 2026

Paying both the account exec and the CSM on an upsell — double compensation — is worth it

It makes two people work hard to grow the account, which is a good trade for the company

Scope: applies to upsells within the first 12 months of a contract

21:07 20Sales: Inside ElevenLabs $330M ARR Sales Machine | The 20x Sales Comp Plan Reps Must Hit | How to Land and Expand in a World of AI | Why Product-Market-Fit is BS, Reps Should Not Be in the Office and Outbound is King with Carles Reina

Larry Shurtz · May 10, 2024

Sales leaders care most about equity, while individual contributors care most about on-target earnings and accelerators

Scope: based on his own hiring experience

20:20 20Sales: How to Build Vertical Sales Teams, Why No Customer Success is BS and Everyone Needs it, How to Hire, Train and Retain the First Reps and Lessons Scaling to $2.1BN Revenue and 1,300 People with Larry Schurtz, CRO @ Genesys

Carles Reina · Feb 14, 2026

Sales leaders should be compensated on equity rather than on how much revenue the company makes; variable pay tied to sales for the leader is wrong and financial independence makes him a better leader

Not being paid on sales volume makes him fully independent and lets him focus on delivering the committed plan rather than on his own compensation

Scope: about his own comp structure as a sales leader

69:52 20Sales: Inside ElevenLabs $330M ARR Sales Machine | The 20x Sales Comp Plan Reps Must Hit | How to Land and Expand in a World of AI | Why Product-Market-Fit is BS, Reps Should Not Be in the Office and Outbound is King with Carles Reina

Sean Murray · Jan 24, 2024

The biggest comp mistake is under- or overpaying, and underpaying cash in a startup while compensating with extra equity is a mistake

Good, transparent market data already exists on what roles pay, so there is no excuse for getting it wrong

Scope: he understands why startups do it

53:45 20Sales: How to Scale Into Enterprise Effectively and the Biggest Mistakes Made When Making the Move From PLG to Enterprise, Why Discovery Today is F***** & The Biggest Lessons on How to Do Sales Team Compensation with Sean Murray, CRO @ Greenhouse

Harry Stebbings · May 2, 2026

Telling salespeople not to worry because they're paid in equity is arrogant, since without tender offers that equity doesn't pay the mortgage.

Illiquid equity has no bearing on a rep's actual cash needs.

28:46 20VC: Inside Clay's Sales Playbook Scaling to $100M ARR | How to Set Sales Comp Plans | How to Read Sales Talent Linkedin Profiles | What Profiles to Hire & Fire | How to Increase Performance and Speed in Sales Teams with Becca Lindquist

Jeanne DeWitt Grosser · Mar 9, 2022

Sales compensation is the thing most in need of change in sales today — it remains a relic of how sales worked twenty years ago and there is large room for innovation in metrics and in blending cash and equity

Comp models haven't evolved with how sales actually works now, though they are very hard to change

Scope: acknowledges comp is hard to change

35:17 20 Sales: The Stripe Sales Playbook; Who Should Create It, When Should it Be Done, Where Do Many Go Wrong | How To Identify 10x Sales Hires and How To Structure the Hiring Process in Sales with Jeanne DeWitt Grosser, Head of Americas Revenue & Growth @ St

Brendon Cassidy · Mar 8, 2024 · hedged

The way companies compensated salespeople five years ago is null and void now; the EchoSign model — rep pays off their fully loaded cost, then earns a high percentage (~15%) — is the right model for the current climate

The goal is to make salespeople profitable as fast as possible and ensure no rep is a cost center, which matters in a capital-constrained environment

Scope: calls compensation a super fluid concept; EchoSign was near-bootstrapped, which shaped the model

21:07 20Sales: Outbound Sales is Dead Today, Why Demand Generation Will Move Back Under Marketing, "Wisdom" that Everyone Needs to Unlearn About Sales & Why You Should Never Hire Someone You Do Not Know in Your First Five Hires with Brendon Cassidy

Becca Lindquist · May 2, 2026

Companies that pay salespeople flat salary with no variable comp need to move to a structured variable plan in order to attract and retain top sales talent.

The best reps want to be walked through the math of how they get to a million dollars; if you can't do that, they conclude you don't care about salespeople.

Scope: acknowledges flat-salary approach can work in the early days, as at Stripe

27:47 20VC: Inside Clay's Sales Playbook Scaling to $100M ARR | How to Set Sales Comp Plans | How to Read Sales Talent Linkedin Profiles | What Profiles to Hire & Fire | How to Increase Performance and Speed in Sales Teams with Becca Lindquist

Harry Stebbings · May 2, 2026

It is stupid not to tie sales pay to performance.

28:38 20VC: Inside Clay's Sales Playbook Scaling to $100M ARR | How to Set Sales Comp Plans | How to Read Sales Talent Linkedin Profiles | What Profiles to Hire & Fire | How to Increase Performance and Speed in Sales Teams with Becca Lindquist

Ishan Mukherjee · Apr 4, 2025

The right go-to-market model is the Slootman one: invest only in bag carriers, with AEs holding both the commit number and the consumption number

You eat what you hunt; it's intense but it puts accountability for both booking and usage on the same people

18:02 Bag carriers only with ae owning commit and consumption

Ishan Mukherjee · Apr 4, 2025

The traditional five-to-six-person account team with one commissioned AE is workable only with really good leadership; in most companies it's very hard to align the incentives toward driving consumption

As Charlie Munger says, it's all about the incentives — getting five or six people on fixed salary to actually drive customer happiness and usage is hard; Datadog can do it, in his own case it was really hard

20:40 Salaried account teams align only under strong leadership

Ishan Mukherjee · Apr 4, 2025

Compensation should stay private but must be explainable — you should be able to give a rational reason for every package if it leaked — while still going very aggressive on performance-based comp or equity for true outliers

An irrational package that leaks has a trickle-down effect on the team, and the team is the company; but outlier victories come from breaking rules

53:35 Private but rationally defensible packages

Lauren Schwartz · Oct 19, 2022

Scaling sales orgs tend to try to solve too many internal problems at once, and the hardest and most important leadership job is driving simplicity and focus for the team.

Wanting sellers to land logos, expand them, retain customers and drive consumption turns the comp plan into a complex laundry list and destroys focus.

43:12 Comp plans become overloaded when trying to solve too many motions at once so simplicity is the real leadership job

Lauren Schwartz · Oct 19, 2022

The secret to a successful comp plan is alignment with the business outcomes the company is trying to drive — and most comp plans do not have that.

43:58 Comp plan must align with business outcomes most plans fail this

Harry Stebbings · Feb 14, 2026 · hedged

A 15–20% commission rate at 100% of quota would be a good deal for a rep

45:58 Fifteen to twenty percent commission is fair to reps

Carles Reina · Feb 14, 2026

Paying 15–20% commission at 100% of quota is too much for a company to sustain

The unit economics would never add up

46:05 Fifteen to twenty percent commission breaks unit economics

Frank Fillmann · Mar 22, 2023

Sales comp plans should be built by aligning how reps are paid with how the company itself reports performance to its shareholders.

Without that alignment, what the customer and rep want diverges wildly from what leadership wants, and first- and second-line managers get squeezed in the middle; with it, the other comp problems solve themselves.

43:00 Align rep comp with how the company reports to shareholders

Chris Degnan · May 23, 2026

The no-quota, no-accountability model at today's AI companies works only while demand is overwhelming, and that period will end

It's raining purchase orders at those companies right now, but that day will change

22:12 No quota model survives only while demand is overwhelming

Stevie Case · Jan 25, 2023

A comp plan is effectively the salesperson's job description and marching orders, so it must be clear enough that a rep knows exactly what to do when the founder isn't in front of them

People are very attuned to what incentives drive; an unclear or misaligned plan will produce the wrong results

30:49 Comp plan functions as job description and marching orders

Matt Plank · Dec 20, 2024

A multiyear kicker should be roughly 10–20% of the base commission rate — e.g. an extra 2–3 points on a 20% rate — never anything close to doubling the payout

The math doesn't work if selling a multiyear deal pays 40% when your commission rate is 20%

31:13 Modest multiyear kicker not a doubled payout

Jason Lemkin · May 6, 2022

At very early stage, quota should be set only so the rep can eat and won't quit — even paying close to 100% of what they close for the first three months is acceptable

You have to train and onboard people, and at sub $1-2M ARR the rep needs a boost to survive; it's unprofitable but not fatal at that scale

15:45 Near full commission payout at earliest stage keeps reps afloat during training

Ben Fiechtner · Aug 2, 2024

Comp plans should be designed last — after you set go-to-market strategy, sales alignment, motion and talent — and should reinforce those choices, rather than being iterated off last year's plan

Comp plans are too often designed after the fact and backed into with small tweaks from last year, instead of holistically derived from the go-to-market strategy

46:18 Comp plans designed last after gtm strategy not iterated from last years plan

Shaunt Voskanian · Mar 21, 2026

If you have to push the product into the market with proactive strategic outbound, you should set more favorable quotas to attract great people; if there is strong market pull and the motion is transactional, you should build in safety nets and optimize for efficiency

Generous quotas entice great people to do genuinely hard pushing work and you reap the benefits; when the market is pulling you, the constraint is keeping up efficiently

50:46 Quota generosity set by push versus pull market

Kyle Norton · May 30, 2025

Building an ML-estimated gross payments volume into AE compensation is worth the forecast risk because it steers reps toward higher-value customers

Individual misses wash out across the portfolio, and after adding eGPV to comp their estimated MRR per deal went up

28:54 Ml estimated payment volume in comp steers reps toward higher value customers

Akshay Kothari · Sep 18, 2024

Trying to reinvent sales by making reps purely consultative with no quota was a mistake; the best salespeople join precisely because there is a quota and a number they can beat

Sales has been done a specific way that works well, and removing quotas and attribution cost them the ability to attract top sales talent, hurting them for the first year or two

14:18 Removing quotas fails to attract top sales talent

Mark Goldberger · Apr 19, 2023

Quota should be set by taking the board-level goal and working backward from it rather than driving forward toward it.

Driving forward you may drive off a cliff; working backward lets you see where the cliffs, landmines and traps are and identify whether there is one path, no path, or multiple paths to the number.

35:12 Quota derived backward from board goal

Becca Lindquist · May 2, 2026

How aggressively you can pay sales accelerators depends on the underlying margins of the business — poor margins compress what you can pay reps

Companies that pay per unit of data or otherwise have weak margins cannot fund rich commission structures; Clay's economics are strong because of how it prices credits

38:38 Margins cap what accelerators can pay

Chad Peets · Jan 9, 2026

Tight comp plan design doesn't hurt recruiting because candidates rarely interrogate comp plan mechanics at that level of detail during interviews

41:06 Tight comp mechanics carry no recruiting cost

Ashley Kelly · Jun 7, 2024

SDR compensation should be structured as 70% base and 30% variable tied to a quota of stage-two opportunities, with OTE adjusted for geographic cost of living and quotas varying by segment/TAM

Stage two means an AE has confirmed the meeting is a real persona fit with next steps, so it is the point at which the SDR has produced something real; different segments have different addressable markets and role types

25:22 Seventy thirty split on stage two opportunity quota

Ashley Kelly · Jun 7, 2024

ACV should change SDR quota levels but not what qualifies as a stage — lower ACV requires a higher number of stage-two opportunities per rep

Per-rep production has to make sense against CAC payback in the finance model, which also accounts for win rates, ACVs and product attach rates

34:46 Quota scales with acv while stage definitions stay fixed

Matt Rosenberg · Oct 4, 2023

Landing a sanctioned enterprise agreement and expanding it across the business are distinct, specialized motions that each deserve their own compensation

Each stage of the value chain is complex in its own right and requires a degree of specialization that warrants separate comp

45:10 Separate comp for land versus expand

Patrick Forquer · May 11, 2026

You should not break compensation bands to pay a standout hire above peers, even when they're clearly excellent

Bands exist for parity and fairness; if people discover the exception it creates a toxic culture and bad long-run outcomes, even though it feels good short term because you land the person

67:33 Never break comp bands parity beats landing the star