Sales Compensation Plan Contract

Appendix A – Sales Compensation Plan Example
Revision Date: April 23, 2019
This document describes the agreement between ______________ (“Company”) and
______________ (“Payee”) regarding terms related to sales incentive compensation. Company
and Payee enter into this agreement whereby Payee provides services to the Company in return for
compensation specified in this agreement.
Title: Account Executive Level [_] Jr. AE [_] AE [X] Sr. AE
Reports to VP of Sales Quota $1,200,000 in Annual Recurring Revenue
On Target Earning $220,000 Compensation Mix 55% / 45%
Base Salary $120,000 Sales Incentive $100,000
Sales Incentive Tier 1 ARR Tier 2 ARR Tier 3 ARR SPIFF

Components Up to $80,000/mo $80,000- Above $100,000/mo Financial Institution
$100,000/mo
Rate/Amount 8% of ACV 12% of ACV 15% of ACV +$1,000/win
Cap No Cap 12 Accounts/year
Table 1. Overview Of the Payee Sales Compensation Plan
All commissions will be calculated and paid once every month, for the preceding month.
Commissions will be calculated and paid out as part of the next payroll cycle, following the month for
which commissions are calculated.
● Base Salary Payout – Sales Rep is due a base salary of __________ , payable every
__________.
● Sales Incentive Payout – Sales incentive compensation is payable every __________.
● Expenses - The Account Executive will be paid for all travel and lodging expenses related to
sales activities within 30 days of being presented with the receipts and a completed and
accepted expense reimbursement form.
● Travel and Lodging - Auto travel: Reimbursed at the current federal reimbursement rate
● Cell phone - Sales Reps will be required to maintain a cell phone as part of conducting sales
business. Sales Rep will be provided an allowance of $50 per month for cell phone usage.
● Client entertainment expenses will be reimbursed as following:
● Meals/Coffee: Reimbursable with receipts
● Special Events: Must be pre-approved. Reimbursable with receipts
Draw – Payee receives a monthly non-recoverable draw against the sales incentive plan as follows
based on the participation and completion of the 90 Day Onboarding Program.
Month 1 Month 2 Month 3 Month 4
Non-Recoverable Draw 100% 66% 33% 0%
Value $8,333 $5,556 $2,778 $0

Table 2. Eligible Draw Month-over-Month
Clawback – In order to receive your full commission with no clawback, the customer must stay live
for 3-months from the day we start billing the customer. If a customer cancels short of the 3-month
mark you will have a prorated amount clawed back from your commission against the sales made.
Draw Clawback – If payee voluntarily leaves the position within the first 6 months of this plan, the
Draw payment(s) will be due back to the Company through a payroll deduction from any monies
owed to Payee.
Splits – Commissions can be split with other Payees, on a deal-by-deal basis at the discretion of the
VP of Sales.
Termination of Employment – On voluntary or involuntary termination of Payee employment with
the Company, commissions will be paid on transactions dated prior to the termination date only. Any
amounts owed to the Payee will be according to employment regulations after withholding taxes and
other dues.
90 Day Onboarding Program – The onboarding program will take place over 90 days and the
following activities are expected from the Payee to be eligible for the Draw as outlined in Table 2.
Days 1-30 Days 31-60 Days 61-90

Company Provide equipment, logins Provide sales training Weekly manager reviews
Responsibility Provide product training Organize 3 customer visits Organize 3 customer visits
Provide sales training
Payee Paperwork filed AE Level 1 Certification AE Level 2 Certification

Responsibility “Desktop” complete Diagnose 3 customer Diagnose 6 customer
Learn 10 use-case studies scenarios scenarios
Able to demo a product Pipeline report at 40% Pipeline report at 80%
Analyze 10 client calls 5 meetings 10 meetinsg
Lunch with every VP
Table 3. 90 Day Onboarding Program
Other Important Terms

1. Payee agrees to follow all Federal and Local laws while engaged in providing services to the
Company during the period of this agreement.
2. Payee shall not engage in any other employment during the term of this agreement.
Company reserves the right to require Sales Rep to terminate any such other employment at
Company’s sole discretion.
3. Payee shall use the most ethical practices while engaging in any sales activity.
4. Payee agrees to protect all confidential material including prospect data, sales data, and client
information belonging to the Company and shall take all reasonable care in making sure that
such confidential material is not disbursed to anyone outside the company.
5. This entire agreement shall be governed by the laws of the State of _______________.
6. VP of Sales reserves the right to override the terms of this agreement without cause.
Company/VP of Sales Payee/Salesperson
By: _______________________ By: _______________________
Title: ______________________ Title: ______________________
Date: _____________________ Date: _____________________

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Appendix A – Sales Compensation Plan Example

Revision Date: April 23, 2019

This document describes the agreement between ______________ (“Company”) and

______________ (“Payee”) regarding terms related to sales incentive compensation. Company

compensation specified in this agreement.

Title: Account Executive Level [_] Jr. AE [_] AE [X] Sr. AE

Reports to VP of Sales Quota $1,200,000 in Annual Recurring Revenue

On Target Earning $220,000 Compensation Mix 55% / 45%

Base Salary $120,000 Sales Incentive $100,000

Sales Incentive Tier 1 ARR Tier 2 ARR Tier 3 ARR SPIFF

Rate/Amount 8% of ACV 12% of ACV 15% of ACV +$1,000/win

Cap No Cap 12 Accounts/year

Table 1. Overview Of the Payee Sales Compensation Plan

which commissions are calculated.

● Sales Incentive Payout – Sales incentive compensation is payable every __________.

accepted expense reimbursement form.

● Meals/Coffee: Reimbursable with receipts

● Special Events: Must be pre-approved. Reimbursable with receipts

based on the participation and completion of the 90 Day Onboarding Program.

Month 1 Month 2 Month 3 Month 4

Non-Recoverable Draw 100% 66% 33% 0%

Value $8,333 $5,556 $2,778 $0

Termination of Employment – On voluntary or involuntary termination of Payee employment with

Days 1-30 Days 31-60 Days 61-90

Payee Paperwork filed AE Level 1 Certification AE Level 2 Certification

Other Important Terms

Company during the period of this agreement.

Company’s sole discretion.

such confidential material is not disbursed to anyone outside the company.

Company/VP of Sales Payee/Salesperson

By: _______________________ By: _______________________

Title: ______________________ Title: ______________________

Date: _____________________ Date: _____________________

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