For the top sales job we sometimes see a sales comp type plan, and sometimes a hybrid between the corporate executive plan and a sales type plan. Which of these two to use would depend mostly on what the sales leader is expected to do as the core role:
A. Run the sales team under the direction of company leadership with a focus on keeping the sales team recruited, coached, and productive
B. Work as a member of the company’s leadership team to set the company strategy, determine how best to address the market for the company’s offerings, and deliver both the needed growth and company financial results.
If most of the time and effort are focused on A. then it’s a sales type plan. If both, then consider a 50/50 sales-type plan and company executive plan. And it’s rarely mostly B. unless there’s an EVP of Sales & Marketing with a VP Sales reporting in, but if this is the case, then a purely executive type plan could be appropriate.
Donya Rose, CSCP, is Managing Principal of The Cygnal Group. She is a recognized expert in sales compensation plan design, regularly speaking at conferences and writing published articles. She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices.