Table of Contents
- Key takeaways
- What is sales compensation?
- What is a sales compensation plan?
- Why sales compensation matters
- The components of a sales compensation plan
- Sales compensation terms you should know
- The 12 types of sales compensation plans
- How to build a sales compensation plan in four numbers
- What a 70/30 or 80/20 split actually pays out
- What the plan costs the company at 60%, 100% and 140%
- Sales compensation by role: SDR, AE, AM, manager and VP
- Sales compensation benchmarks
- Common sales compensation mistakes
- Sales compensation best practices
- Compliance and legal considerations
- A sales compensation plan template
-
Frequently asked questions
- What is an example of sales compensation?
- What is the difference between sales compensation and a sales compensation plan?
- What is a good commission rate for sales?
- What is the difference between a commission and a bonus?
- How do you pay a new rep during their ramp?
- How often should you change a sales compensation plan?
- Do you still pay commission on a deal that gets cancelled?
- Final thoughts
- Related reads
Sales compensation is the total package a salesperson earns for doing the job: a fixed base salary, plus variable pay tied to results, plus any bonuses, equity and benefits on top.
It is usually the largest line item in a sales budget and the strongest single lever on what a sales team does all day.
Most guides stop at that definition and a list of plan types.
This one shows the arithmetic as well. You will see what a 70/30 split actually pays out in dollars, what a plan costs the company at 60% and at 140% of quota, what five real roles are paid, and where the published benchmarks come from.
Let’s dive in.
Key takeaways
- Sales compensation has two halves. Fixed pay you owe regardless of results, and variable pay tied to performance. The ratio between them is the pay mix.
- Four numbers make a plan: on-target earnings, pay mix, quota, and commission rate. Each is derived from the one before it, and the fourth is not a choice.
- There are twelve common plan structures. Base plus commission covers most B2B quota-carrying roles. The other eleven exist for specific situations.
- The median SaaS account executive earns $200,000 OTE against a $920,000 quota, a 4.6x ratio, per The Bridge Group’s 2026 study of 158 companies.
- A plan the rep cannot calculate alone is a broken plan, however elegant it looks in the spreadsheet.
What is sales compensation?
Sales compensation is the combination of fixed and variable pay a company gives a salesperson in exchange for selling. Unlike most roles, where pay is a salary and an annual review, sales pay is deliberately tied to measurable output, so a large share of it moves with performance.
A complete package usually contains:
- Base salary. Guaranteed, paid on the regular payroll cycle regardless of results.
- Variable pay. At-risk earnings, paid only when results arrive. Usually commission, sometimes a bonus, often both.
- Commission. A rate applied to an amount sold, so it scales with every dollar.
- Bonuses. Fixed sums are paid on a yes-or-no event, such as hitting an annual target.
- SPIFFs and contests. Short-term incentives used to push one behaviour for one period.
- Equity. Stock or options, usually reserved for leadership at venture-backed companies.
- Benefits. Healthcare, retirement contributions, car or travel allowances. Part of total rewards, though nobody sells harder for them.
What people usually mean by “sales compensation” is the first three: base, variable, and the rules connecting them to results.
What is a sales compensation plan?
A sales compensation plan is the written document that turns that package into rules. It states what the rep earns, what they must do to earn it, how it is measured, when it is paid, and what happens when something goes wrong.
A plan that exists only as a conversation is not a plan. It is a future dispute. The document has to answer seven questions in writing:
- What is the on-target earnings figure, and how does it split between base and variable?
- What is the quota, over what period its measured, and how?
- What rate converts performance into dollars?
- What happens above target, and what happens below it?
- When is a deal credited, and when is the money actually paid?
- What happens if the customer cancels or never pays?
- What happens if the rep leaves before the deal closes?
Everything below is about answering those well.
Why sales compensation matters
Sales compensation is the largest controllable driver of sales behaviour.:
Reps optimise for what they are paid on. Pay on bookings, and you get bookings, including the ones that never collect. Pay on collected revenue, and cash discipline improves while the cycle slows. Neither is wrong, but you are choosing one.
It sets who you can hire. On-target earnings are the number a candidate compares against the market. Set it below the local band, and you lose people before the first interview.
It is a forecasting instrument. A plan priced only at 100% of quota tells you nothing about what you owe in a bad quarter, and most of a team lands on one side of quota rather than exactly on it. This is why the cost tables below matter more than the target ones.
It is a retention mechanism. Plans that change frequently or that pay out differently from how the rep calculated them destroy trust faster than a bad quarter does. A rep who cannot predict their own paycheck starts interviewing.
The components of a sales compensation plan
Fixed pay
The base salary. It buys availability, effort during long cycles, and the non-selling work the job requires: CRM hygiene, forecasting, onboarding, territory planning. Long sales cycles need more of it, because nobody survives a six-month ramp on commission alone.
Variable pay
The at-risk portion is paid on results. Split into commission, which scales with the amount sold, and bonus, which is a fixed sum per event.
Pay mix
The ratio between the two is always written base first. A 70/30 pay mix on $120,000 of on-target earnings is $84,000 base and $36,000 variable.
The governing principle is influence. The more control the seller has over whether the deal happens, the deeper the variable share should go. A field seller running the whole cycle sits nearer 60/40. An inbound rep closing demand marketing generated sits nearer 80/20. A sales engineer supporting deals without owning them sits nearer to 90/10.
Quota
The performance target variable pay is measured against a stated period. Derived from a multiple of on-target earnings, where gross margin sets the multiple, because margin decides how much of each revenue dollar is left to pay for the sale.
Commission rate
The percentage converting attainment into dollars. As the build section shows, this is not a number you pick.
The Governors: Threshold, Decelerator, Accelerator, Cap
These rules shape the payout curve above and below target. Covered in detail further down.
Sales compensation terms you should know
Term | What it means | Worked examples |
OTE (on-target earnings) | Total cash earned at exactly 100% of quota | $120,000, not a range and not a ceiling |
Pay mix | Split of OTE between base and variable, base stated first | 70/30 on $120,000 is $84,000 base, $36,000 variable |
Quota | The target variable pay is measured against, per period | $600,000 a year, from $120,000 OTE at a 5x multiple |
Commission rate | The percentage converting attainment into dollars | $36,000 variable over $600,000 quota is 6.0% |
Attainment | Performance against quota, as a percentage | $360,000 closed against $600,000 quota is 60% |
Accelerator | A higher rate above a stated attainment point | 6.0% up to quota, 9.0% above it |
Decelerator | A lower rate below a stated attainment floor | 3.0% until the rep passes 50% of quota |
Threshold | The attainment level below which nothing is earned | No commission paid under 50% of quota |
Cap | A ceiling on total payout, stated or absent | Payout stops at 120% of quota |
Draw | An advance against future commission | $3,000 a month, recoverable or non-recoverable |
Clawback | The rule reversing paid commission when money does not arrive | A cancelled $25,000 deal returns $1,500 |
Crediting | The event assigning a deal to a rep | Credited on signature, or on first payment |
SPIFF | A short-term incentive for a specific push | $500 per competitive displacement, this quarter only |
Leverage | Upside available above target | 3x leverage means a top performer can earn triple the variable |
The 12 types of sales compensation plans
Most companies need one of these. The rest exist because a specific situation demands them.
1. Salary only
A flat salary, no variable component.
Fits: roles with no attributable influence over whether a deal closes. Support, some sales engineering, brand-new markets where no quota can honestly be set yet. Fails: the moment you want one specific behaviour to change. Salary is not a lever.
2. Straight commission
All variable, no base. The rep earns a percentage of everything they sell and nothing otherwise.
Fits: short-cycle, high-volume selling where a rep can genuinely earn in week one. Common in real estate, insurance, and some retail.
Fails: long sales cycles. A six-month enterprise cycle on straight commission is an unpaid internship, and you will hire nobody good.
3. Base plus commission
A guaranteed base with commission on top. This is the default for almost every B2B quota-carrying role and the structure the rest of this guide assumes.
Fits: the overwhelming majority of quota-carrying sales jobs. Fails: roles whose output cannot be counted in units or dollars.
4. Base plus bonus
A guaranteed base plus fixed sums paid on events rather than a rate on volume.
Fits: roles where the valuable outcome is not a dollar amount. A customer success manager hitting retention, an SDR hitting a meetings number. Fails: high performers, who cap out. A bonus pays the same whether the target is beaten by a dollar or by a million.
5. Tiered commission
The rate rises as the rep passes stated milestones. 6% to quota, 9% from 100% to 150%, 12% above.
Fits: teams where the top decile has real headroom above quota and you want to pay for it. Fails: teams where nobody cleared quota last year. The tier is decoration, and reps know it.
6. Gross margin commission
Commission paid on the profit of the deal rather than its revenue.
Fits: businesses where reps can discount and margin varies materially by deal. It stops a rep buying their commission with your margin. Fails: fixed-price software, where margin is near identical on every deal and the complexity buys nothing.
7. Draw against commission
A regular advance against future commission. Recoverable draws are repaid from later earnings. Non-recoverable draws are not, making them a guaranteed floor.
Fits: ramping new hires, seasonal businesses, territory changes. Median account executive ramp is 6.2 months, so this covers half a year of uncertainty. Fails: as a permanent structure. A recoverable draw that never gets repaid is a debt the rep is carrying, and they will leave rather than work it off.
8. Territory volume commission
The team covering a territory shares commission on total territory revenue rather than individual deals.
Fits: genuinely team-sold, geographically defined markets. Fails: where individual contribution is visible and unequal, because your best rep is subsidising your worst.
9. Multiplier commission
A tiered plan where attainment against a second metric multiplies the payout. Hit 100% of revenue and 90% of new logos, and the whole commission is multiplied.
Fits: when you need two behaviours at once and one is being ignored. Fails: simplicity. This is the structure most likely to produce a rep who cannot calculate their own check.
10. Absolute commission
A fixed rate per unit or per deal, independent of quota. $500 per new customer, every time.
Fits: transactional selling with uniform deal sizes, and SDR roles paid per meeting. Fails: wide deal-size variance, where it either overpays small deals or underpays large ones.
11. Relative commission
Commission paid against quota attainment rather than raw volume. The standard quota-based model most B2B plans use.
Fits: any role where quota can be set fairly and territories are roughly comparable. Fails: wildly unequal territories, because the plan then measures territory quality rather than rep performance.
12. MBO (management by objectives)
Payout tied to scored objectives rather than a countable number.
Fits: managers, enablement, partnerships and new-market roles with no clean metric yet. Fails: any role with a countable number. MBOs are scored by opinion, and opinion-scored pay corrodes trust quickly.
The most common mistake here is picking the structure the founder had at their last company. Structure follows the role’s influence over the deal, not habit.
How to build a sales compensation plan in four numbers
Step 1: Set on-target earnings from the market
Start with what the role earns locally, not with what your budget wants it to earn. $120,000 for the worked example below.
One warning that trips up first-time plan builders: the Bureau of Labor Statistics reports gross pay including commissions and production bonuses, so its medians are total cash, not base salary. Read a published median as a base and you will set an OTE well above market rather than a base slightly above it.
Step 2: Split OTE into base and variable
$120,000 at 70/30 gives $84,000 base and $36,000 variable. This is the only one of the four steps where judgement does real work, and influence over the deal is the deciding factor.
Step 3: Derive quota from a multiple of OTE
Gross margin sets the multiple. The published B2B software median is 4.6x. This example uses 5x to keep the arithmetic legible, so a $120,000 OTE carries a $600,000 quota.
Step 4: Derive the commission rate
Variable pay divided by quota. $36,000 divided by $600,000 is 6.0%.
That last step is the one people treat as a choice, and it is not. The rate is already decided by the three numbers above it:
Commission rate = variable share ÷ quota multiple:
Thirty percent variable at a 5x multiple is 6.0%. Twenty percent at 5x is 4.0%. Forty percent at 5x is 8.0%. The OTE cancels out of that division, so a $300,000 plan at 70/30 and 5x pays the same 6.0% as an $80,000 one.
Pick any other rate, and the plan contradicts its own offer letter. Pay 8% on a 70/30, 5x design, and the rep earns $132,000 at exactly 100% of quota, which is $12,000 more than the OTE you promised.
What a 70/30 or 80/20 split actually pays out
Here is the part most guides skip. Run one $120,000 OTE through three pay mixes and the dollar amounts fall straight out.
Pay mix | Base | Variable | Per $25,000 deal | At 60% of quota | At 100% | At 140% |
70/30 | $84,000 | $36,000 | $1,500 | $105,600 | $120,000 | $134,400 |
80/20 | $96,000 | $24,000 | $1,000 | $110,400 | $120,000 | $129,600 |
60/40 | $72,000 | $48,000 | $2,000 | $100,800 | $120,000 | $139,200 |
Every figure assumes a straight-line commission: one flat rate on every dollar of attainment, no accelerator, no decelerator, no cap. Quota is $600,000 and the average deal is $25,000.
Three things worth noticing:
All three pay exactly $120,000 at quota. The pay mix is invisible at 100%. It only matters on either side of it, which is where reps actually spend the year.
The deeper mix is a bet on performance. At 60% attainment the 80/20 rep takes home $4,800 more than the 70/30 rep for identical revenue. At 140% the order reverses. Six reps at 60% attainment and that gap is $28,800 on your payroll line.
The per-deal column is what the rep feels. Nobody experiences variable pay as an annual figure. They experience it as the number attached to the deal in front of them.
Almost nobody actually runs 70/30 or 80/20. WorldAtWork measured target pay mix across twelve sales roles and not one landed on either figure. The band ran 54/46 to 66/34 and clustered near 60/40: field new-account sellers at 57/43, inside outbound at 59/41, inside inbound at 65/35. The round numbers are what people say out loud in an offer conversation.
What the plan costs the company at 60%, 100% and 140%
The table above is the rep’s side. This is yours. It adds an accelerator: from 100% of quota upward the rep earns 1.5x the base rate, so 6.0% up to quota and 9.0% past it.
Line item | 60% of quota | 100% of quota | 140% of quota |
Revenue booked | $360,000 | $600,000 | $840,000 |
Commission earned | $21,600 | $36,000 | $57,600 |
Base salary | $84,000 | $84,000 | $84,000 |
Total paid to the rep | $105,600 | $120,000 | $141,600 |
Comp cost per revenue dollar | 29c | 20c | 17c |
The rep who misses is the expensive one. Comp cost per revenue dollar falls as attainment rises, because the base is fixed and the revenue is not. The 140% column is what surprises finance: $141,600 against a $120,000 plan reads as an 18% overrun until you set it beside $840,000 of revenue at 17 cents on the dollar.
A cap is a transfer, not a saving. Cap this plan at 120% and the rep booking 140% takes $130,800 instead of $141,600. They lose $10,800, and you keep the last $120,000 of revenue at zero marginal commission. That is also exactly why capped plans push deals into next year: above the cap, the next dollar pays the rep nothing.
We looked for a published benchmark on where an accelerator should start and found none. The 100% trigger and 1.5x rate used here come from a real executive plan filed with the SEC, described in the template section below, so treat them as one company’s choice rather than a market convention.
Sales compensation by role: SDR, AE, AM, manager and VP
Five plans, built with the same four numbers in the same order. Where a published median exists the OTE is anchored to it. Everything to the right of OTE is derived.
Role | OTE | Base | Variable | Pay mix | Quota | Rate | Paid on |
SDR | $80,000 | $55,000 | $25,000 | 69/31 | 180 qualified meetings | $139 per meeting | Meetings held and accepted |
Account executive | $200,000 | $120,000 | $80,000 | 60/40 | $920,000 new ARR | 8.7% | Closed-won new ARR |
Account manager | $140,000 | $105,000 | $35,000 | 75/25 | $500,000 expansion ARR | 7.0% | Expansion, gated on retention |
Sales manager | $220,000 | $154,000 | $66,000 | 70/30 | $4,600,000 team ARR | 1.4% | Team attainment |
VP of sales | $300,000 | $180,000 | $120,000 | 60/40 | $12,000,000 company ARR | 1.0% | Company new ARR |
SDR. OTE, base and variable are The Bridge Group’s medians across 351 companies. Median SDR ramp is 3.0 months, the lowest since 2010, so the first quarter carries a fraction of the annual number. This plan fails when “qualified meeting” is not defined in the document: every disputed payout afterwards becomes an argument about a word.
Account executive. OTE is The Bridge Group’s 2026 median of $200,000, and the quota is that OTE at their reported 4.6x multiple. Median AE ramp is 6.2 months, the highest in the study’s history. Take the ramp discount at the start or pay for it at the end.
Account manager. Full commission on a renewal that was always going to happen buys nothing, which is the only reason the retention gate is there.
Sales manager. The 4.6x rep multiple does not transfer to a leader. This quota is a roll-up of five AE numbers, putting the ratio near 21x OTE. Apply a rep multiple to a manager and you produce a quota nobody can hit.
VP of sales. Same problem, larger. Equity sits on top of this $300,000, never inside it. VP grants at venture-backed companies run roughly 0.2% to 0.8% of fully diluted equity depending on stage, per Index Ventures’ Rewarding Talent handbook, and a VP of sales lands at the low end because their variable cash is already large.
Sales compensation benchmarks
These sources disagree with each other on purpose, and the disagreement is the useful part.
Benchmark | Figure | Source and year |
Sales reps, technical and scientific products | $104,920 median, $200,440 at the 90th percentile. Total cash, commissions included | |
Median SaaS AE on-target earnings | $200,000, up from $190,000 in 2024 | The Bridge Group, 2026, n=158 |
Quota-to-OTE ratio | 4.6x, up from 4.2x in 2024 | The Bridge Group, 2026 |
Share of reps hitting annual quota | 48%, down from 51% in 2024 | The Bridge Group, 2026 |
Target pay mix, AE roles | 57/43 field new account, 59/41 inside outbound | WorldAtWork, sales compensation practices survey |
Organisations capping incentive pay | 56% | WorldAtWork |
AE commission rate band | 7.6% to 9.3% of quota | Derived: variable share ÷ 4.6 |
A government survey of every US employer reports a $104,920 median for technical and scientific sales reps. A survey of 158 B2B software companies reports $200,000 for a largely similar job. One counts every employer in the country, the other counts venture-scale software. Read the population before you read the number.
One more worth knowing: The Bridge Group also reports a median quota of $960,000. Divide that by the $200,000 median OTE and you get 4.8x, not the 4.6x they report. Both are correct, because each median is computed separately across the sample and the median of a ratio is not the ratio of two medians. Use the reported figure, not your own division.
Common sales compensation mistakes
Mistake | What it costs | The fix |
Capping a role you called uncapped | Above the cap the next dollar pays nothing, so deals get pushed into next year and you lose the revenue too | Write the cap in before anyone signs, or price outliers by written exception |
Changing quota inside a measurement period | Every number that rep receives afterwards is discounted | Move the change to the next period boundary and reissue the document |
Paying on bookings you cannot collect | Commission leaves before the cash arrives | Pay on collected revenue, or tie the clawback to the amount received |
A plan the rep cannot calculate alone | Every payday becomes a support ticket, and trust erodes | If it needs more than one multiplication and one addition, cut a component |
No written clawback rule | A cancelled deal becomes a negotiation instead of a calculation | Write the trigger, the method and the window before the first deal closes |
Undefined crediting | Two reps claim the same deal and the manager arbitrates by memory | Define the crediting event and the split rule in the document |
Copying a plan from a different sales motion | Inbound economics applied to outbound roles, or rep multiples applied to managers | Rebuild from the four numbers rather than inheriting someone else’s answer |
Sales compensation best practices
Price the plan at 60% before you price it at 100%. Just under half of reps hit annual quota, so the 100% column is the least likely outcome on the page.
Keep it to one multiplication and one addition. Complexity does not motivate. If the rep needs a spreadsheet to know what they earned, the plan has already failed at its main job.
Change plans once a year, at a period boundary. Write the plan period into the document so the boundary is a date rather than a judgement call.
Pay quickly. The gap between closing and being paid is where motivation leaks. Monthly payment with an annual true-up is a reasonable default.
Whop’s payouts network, for example, settles to a rep’s bank next business day for $2.50, with faster rails available at a higher per-payout fee.
Model the top and bottom decile before you launch. Run the plan against last year’s actual attainment distribution, not against a hypothetical team where everyone hits quota.
Put it in writing and get it signed. Every time it changes.
Compliance and legal considerations
This is not legal advice, and comp documents should be read by an employment lawyer before they ship. Three things are worth knowing before that conversation.
Written agreements can be a legal requirement. California Labor Code section 2751 requires commission agreements to be in writing, with a signed copy given to the employee and a signed receipt retained. It applies based on where the work is performed, not where the company is incorporated, so a distributed team can pull you into it.
Earned commission rules differ by state. Whether a commission on a deal closed before termination is owed after the rep leaves is a matter of state law and plan language together. Silence in the document does not mean the company wins.
Pay equity applies to variable pay too. Differences in quota, territory quality and accelerator access all affect realised earnings, and they are all reviewable.
A sales compensation plan template
Fill the brackets and this is a plan. Every line exists because leaving it out creates a dispute the document cannot settle.
SALES COMPENSATION PLAN
Role and period | What to fill in |
Role | [title] |
Plan period | [start] to [end] |
Measurement period | [monthly / quarterly / annual] |
The four numbers | What to fill in |
On-target earnings | $[OTE] = $[base] base + $[variable] variable ([pay mix]) |
Quota | [$ or units] per period, measured as [definition] |
Commission rate | [rate]% from [B]% of quota to 100% |
The governors | What to fill in |
Threshold | Nothing is earned below [A]% of quota |
Decelerator | [rate]% between [A]% and [B]% of quota |
Accelerator | [1.5]x the rate above 100% of quota |
Cap | [none / payout stops at [C]% of quota] |
Mega-deal | Any deal above $[amount] is priced by exception |
The rules that settle disputes | What to fill in |
Ramp | [D]% of quota in month 1, full quota from month [N] |
Crediting | A deal is credited when [event]. New business means [definition]. Where two people work one deal, the split is [rule]. |
Payment | Paid [monthly], trued up [annually]. Disputes in writing within [60] days. |
Clawback | Commission is [reversed / prorated to the amount collected] if the customer cancels or fails to pay within [X] days. |
Termination | Commission on deals closed before the last day of employment is [paid / forfeited]. |
Signatory | Signature | Date |
Rep | ________________________ | ______________ |
Manager | ________________________ | ______________ |
Executed plans are public, and worth reading. SEC full-text search returns over 1,900 filings containing the exact phrase “sales compensation plan”, including complete executive agreements filed as exhibits. TruBridge’s Chief Sales Officer plan, filed 17 March 2025, opens in one click and shows $700,000 target compensation, a $350,000 base, a 50/50 mix, a $95,177,750 bookings goal, a 50% threshold and a payout accelerating to 1.5x above goal. It is a more useful reference than most templates, because somebody had to actually live with it.
[SCREENSHOT: TruBridge Exhibit 10.16 on sec.gov, scrolled to the block showing Target Total Comp, Base Pay, Bookings Goal and threshold]
Frequently asked questions
What is an example of sales compensation?
A $120,000 on-target earnings package at a 70/30 pay mix: $84,000 in guaranteed base salary and $36,000 in variable pay, earned at 6.0% commission against a $600,000 annual quota. At 60% of quota that rep earns $105,600. At 140%, with a 1.5x accelerator above quota, they earn $141,600.
What is the difference between sales compensation and a sales compensation plan?
Sales compensation is the pay itself, all the money and rewards a salesperson receives. The sales compensation plan is the written document defining how that pay is calculated, measured and disputed. One is the outcome, the other is the rulebook.
What is a good commission rate for sales?
There is no universal figure, because the rate is derived rather than chosen: variable share divided by quota multiple. A 70/30 mix at a 5x quota multiple gives 6.0%. Published B2B software AE rates cluster in a 7.6% to 9.3% band once the 4.6x median multiple is applied. Rates outside software run considerably wider.
What is the difference between a commission and a bonus?
A commission is a rate applied to an amount, so it moves with every dollar sold. A bonus is a fixed sum paid on a yes or no event, identical whether the target is beaten by a dollar or by a million. Many senior plans carry both.
How do you pay a new rep during their ramp?
Two mechanisms, chosen before the offer goes out. Ramp the quota, so the rep carries a reduced number on a written schedule until they reach full quota. Or hold the quota and guarantee the variable pay as a non-recoverable draw. Median AE ramp is 6.2 months, so the choice covers roughly half a year of payroll.
How often should you change a sales compensation plan?
Once a year, effective at the start of a measurement period, never inside one. Changing quota mid-period discounts every number the rep receives afterwards. Write the plan period into the document so the boundary is a date rather than an argument.
Do you still pay commission on a deal that gets cancelled?
Whatever the written plan says. If it says nothing, you have a dispute rather than a rule. A common approach is proration: where only partial payment was received, the commission is reduced in proportion to the amount collected. Earned-commission rules vary by state, so this is the clause to put in front of a lawyer.
Final thoughts
Sales compensation looks complicated because it is usually explained backwards, starting with plan types and structures rather than with the four numbers underneath them. Start with on-target earnings, split it, derive the quota, and let the rate fall out of the division. Then price the result at 60% and 140%, not only at the number almost nobody spends the year sitting on.
The plan that works is rarely the clever one. It is the one the rep can calculate in their head, the one finance can forecast, and the one that still says the same thing in March as it said in January.
