Tag Archives: New hire

First year comp plan for a new experienced sales person

Question and answer format

Question

We need a comp plan for the first year for a new experienced sales person.

Answer

My suggestion is that you first be clear about the long-term nature of the role, the expected level of productivity (e.g., sales/year), and the amount of total compensation you feel would be appropriate for that level of productivity. You can then design the “steady state” comp plan for the longer run.

Once you have designed the long-term comp plan, you will be able to clearly state the base pay amount as the base for that long-term plan. Let’s assume it’s $60k base with a target total compensation of $100k. Then you would offer a non-recoverable first year draw of $40k with the expectation that the second year, any pay in addition to the base would have to be earned based on the mechanics of the incentive plan.