Has anyone dealt with the clause below in their comp plan? “If a participant exceeds 100% of their assigned quota in a single transaction (or related transactions from a single engagement), their ability to earn commissions on amounts exceeding 100% of their assigned quota for that transaction will be subject to review and possible reduction at the sole discretion of the CEO and CFO.” Should I be concerned? I've had opportunities in my career to exceed my number significantly in a single transaction a few times, but I've never encountered (or perhaps just never noticed) such a clause.
Maybe ask to see the numbers on how often they exercise those reviews?
The ole "You didn't earn that" trope. Like others have suggested, get more details and see if they will quantify it. Blanket statements as applied to compensation are rarely in the sales rep's favor.
More well-known as the “windfall clause.” If you blow out your number on a single deal, we have the right to raise your quota or reduce your payout. It is a BS clause, but unfortunately pretty common. I have seen it executed by companies like SAP, though rare.
Thank you
Thank you I would say quota is fair , territory strong and during ramp up I will have multiple opportunities to actually hit numbers in a single deal
I'd say yes - you should be concerned. There's probably a specific situation that the org is trying to avoid - but that's something that should be addressed in the math of the plan. Any blanket statement about arbitrary review / reduction is inherently questionable. Now, that said - it really depends on the overall comp plan. Not all plans are created equal, and it could be that leadership has created a low bar for quota in order to try to achieve a high % of the team hitting (well above the industry avg of ~40%)... in that case this might be justified. But it's still likely to lead to a dispute because it's so vague.