Pick the right pay mix

Who this is for

Founder led lower-middle market companies with 5 to 50 million in annual revenue that want clear pay rules by role.

The quick answer

For new logo sales use on target earnings with a mix like sixty base and forty variable or fifty and fifty for shorter cycles. For account management tie variable to net revenue retention and on time collections. For non sales roles use a smaller variable pool tied to company and team outcomes.

The method in seven steps

Write outcomes by role
New revenue for hunters. Net revenue retention for account managers. Delivery, quality, and project outcomes for non sales roles.
Set on target earnings and mix
Publish base and variable for each sales role. Use a higher base for longer cycles.
Define measures and weights
Keep to two or three measures per role. Example for account managers. Net revenue retention and collections.
Add accelerators and floors
Reward over plan results with a simple accelerator. Use floors so variable only pays when the company meets a minimum result.
Set timing and clawbacks
Pay monthly or quarterly based on cycle length. Tie payout to cash received where appropriate.
Write rules for splits and exceptions
Document how to split credit across teams and how to treat multi year terms and services revenue.
Publish a one page plan with examples
Provide five worked examples so everyone can check the math.

Example

A firm moved hunters to fifty and fifty for a short cycle offer and kept sixty and forty for complex sales. Account managers earned on net revenue retention and collections. Forecast accuracy and collections both improved.

Pitfalls and fixes

Too many measures. Keep to the vital few.
Paying bookings that never collect. Link payout to cash rules.
Hidden exceptions. Write them and add examples.

Checklist

Outcomes by role
On target earnings and mix
Measures and weights
Accelerator and floor rules
Timing and clawbacks
One page plan with examples