Before you decide the comp plan sucks, figure out how it pays

Most people read two lines of a comp plan: the quota and the OTE. Then they decide whether it sucks. The part that decides what you actually take home is usually further down.

What to read, in order

• Quota and OTE. Divide one by the other. That multiple tells you more than either number alone.
• Base and variable split. The more of your pay that's variable, the more the quota matters.
• Accelerators. Where they start, and what they pay. Past 100% is where plans are either generous or not.
• Decelerators. What you get paid below a threshold. Some plans pay nearly nothing under 50%.
• Caps. Whether there's a ceiling on what you can earn, stated or buried.
• Multipliers. Extra credit for new logos or certain products. This is where the plan tells you what the company actually wants.
• Crediting and splits. Who gets credit when two people touch a deal, and what happens to a territory that changes mid-year.
• Clawbacks and payout timing. When you actually get paid, and what they can take back if a customer leaves.

Then decide

A plan with a hard quota and real accelerators can be a good plan. A plan with an ordinary quota, a cap and a fat decelerator can be a bad one. You won't know which you have until you've read the whole thing.

None of this is legal or tax advice. If something in the plan doesn't make sense, ask whoever runs comp to walk you through it, in writing. If they can't explain it, that's worth knowing too.

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