Sales and go-to-market · Answered by Golden Section from more than 400 B2B software companies observed
Design the plan around the behavior you want repeated and the cash the company actually collects. Pay a base low enough that it does not satisfy a rep and high enough to make the whole package believable. Set quota from what your funnel and ramp can produce rather than from the board plan, and use tiered commission that rewards performance above target without a ceiling. Pay commission only after the customer pays, only once on the same revenue, and never on deals that failed qualification. Put the plan in writing and log every change, because investors and buyers will ask for two years of commission history. Sales cycle and deal size set most of the parameters, and so does how much of each sale the rep actually controls. Start by running the proposed plan against last year's actual bookings to see what it would have paid, and to whom.
Pay for qualified, collected revenue, and never cap the upside for the reps who produce it. A plan you cannot model against last year's deals before launch is not ready to launch.
| Metric | Value | What it means | Source |
|---|---|---|---|
| Median AE quota-to-OTE | 4.6× (median quota $960K; median OTE $200K) | annual quota ÷ on-target earnings158 B2B companies, published June 2026; up from 4.2× in 2024 | External benchmarkThe Bridge Group, AE Models, Motions & Metrics 2026 |
| Tiered targets | bottom tier at median historical attainment; middle at top quartile; top at top 10% | attainment levels at which commission rates step updesigned to move core performers toward star results | Golden Section playbookSales Compensation Plan |
| Commission records at a liquidity event | two years | history of commissions paid that buyers and investors expect to seetrack actuals, benchmarks and every change to the plan | Golden Section playbookSales Compensation Plan |
| Reps at quota | 48% | share of account executives reaching quotadown from 51% in 2024; a quota most of the team misses is usually a design problem | External benchmarkThe Bridge Group, AE Models, Motions & Metrics 2026 |
Salespeople are self-interested, and a comp plan tells them exactly what the company will pay them to do. Pay at signature and you get signatures, including deals the customer will not pay for. Pay on any contract and reps will fill quota with unqualified deals that churn. Cap commission and your best reps stop selling in November. Give the team price as the only lever and they will trade it for a close date.
The sales compensation play sets the rules that prevent those outcomes: commission after payment, no double payment on expansion, no commission on unqualified deals, and tiers built so each class of performer has a reason to push. Quota should come from the funnel, because a quota the pipeline cannot support is a plan to miss. And the whole plan should be checked against the sales efficiency ratio, because rep compensation is the largest part of the cost of each new dollar of ARR. Commission structures are hard to walk back once reps have lived under them, so design the second year's plan before you launch the first.
The numbers are invented. A company sets account executive OTE at $180K, half base and half variable, with an $800K new-ARR quota, about 4.4 times OTE. Running the plan against last year's deals shows a problem: the two top earners would have reached the highest tier mostly on multi-year deals signed at deep discounts, and one of them had $90K of commissions on customers who paid late. The company adds a minimum contract value, requires approval for discounts beyond a set level, and moves commission payment to after collection. It keeps the tiers uncapped. The revised plan pays nearly the same total, but to the reps who brought in the revenue the company wanted.
For reps who sell long, complex enterprise deals, a larger base and a smaller variable share is normal, because the rep controls less of each quarter. And in the first year of a new motion a draw or ramp quota may be fair, as long as it has an end date.
From the Golden Section mistakes list, each paired with the play that prevents it.
Commission structures are semi-permanent, so a hasty first plan sets a precedent that is expensive to undo.
Comp design is the purest case of aligning self-interest with what the company needs.
A plan that rewards close dates over price teaches reps to discount, and buyers to wait.
Paying on deals before they are signed and paid inflates bookings and hides the real state of the company.
In the order we would run them. Each is on its own page, most with a free Excel template.
Sets base, quota, tiers and payment rules, and the system for tracking them.
Provides the conversion rates that quota should be derived from.
Tracks each rep's performance and ramp so the plan pays for the right results.
Checks that the cost of the plan keeps new ARR affordable.
Sales & marketing plays Compensation sits inside the full sales system, from funnel to metrics to org design.
Quotas should come from your own funnel: the qualified pipeline a rep can generate or receive, your stage conversion rates, and average deal size, adjusted for ramp. Set them so a core performer can reach target and a star can exceed it. If most of the team misses, check the quota before the reps.
The Bridge Group's 2026 study puts the median at 4.6 times on-target earnings, with a median quota of $960K. We would treat that as a reference rather than a target. The ratio that matters to you is whether the fully loaded cost of the sales team keeps your sales efficiency near $0.70 of spend per $1 of new ARR.
After the customer pays, not at signature. It keeps contracts from sitting in receivables, removes the need for clawbacks, and ties the rep's pay to revenue the company actually has.
Reviewed by Dougal Cameron, CEO & Co-Founder on 2026-09-23. Golden Section observations are labeled separately from external benchmarks and illustrative arithmetic.