How do you find the right balance between base and incentive compensation? How much risk & reward should your salespeople and engineers have? Are you overpaying your people? This session provides a basic overview of the key elements of incentive compensation, and reviews the decisions you need to make in order to craft optimal plans for your company. You will learn the wide variety of plans offered in our business, with best practices taken from hundreds of Solution Providers across North America. •How to craft offers to attract talent •What compensation metrics are important, and how yours compare •Incenting the right behaviors This session is led by John Gaillard and Mike Schmidtmann, who work with Solution Providers across the country to grow their businesses and improve profits.

1. Presented by
Mike Schmidtmann
John Gaillard

2. What Happens
when you
Change
Compensation
Plans?

3. Top Executive and Engineer Found a New Company

5. We are doing great. How come we don’t have any money?

6. “Let’s sell our way out of this. Marketing. Leads. New People.”

7. “Help!! We are about to run out of cash.”

8. Our sales and margins are great. Where’s the problem?

9. Sales Compensation:
33.7%
Sales Manager:
6.4%
Admin & Inside Sales:
3.1%
Marketing & Lead Gen:
5.3%
Pre-Sales Engineering:
3.5%
Expenses & Benefits:
7.2%
Total Cost of Sale:
59.2% of GP

10. How did we get in to this mess, and how do we get out of it?

11. Compensation Metrics &
Tools
Aligning Incentives &
Strategy
Best Practices

12. What is Your Biggest
Compensation Problem?

14. 1. Comp Plans Don’t Change
with the Times

15. 2. Total Cost of Sale is
Too High - Overpay

16. 3. Requires Manual
Calculations

17. 4. Isn’t Attractive to
Potential New Hires

18. 5. Incents Wrong Behaviors

19. 6. Gray Areas & Loopholes

20. 7. Difficult to Change

22. Compensation Metrics &
Tools
Aligning Incentives &
Strategy
Best Practices

24. Comp as % of G.P.

25. Total Sales
Compensation
Total GP
Compensation
= as % of GP

26. <20%
25%
30%+

27. Base Salaries

28. Uncle Sam
Doesn’t Care if
Your
Compensation
is Salary or
Commission

29. Does Higher Comp Drive
Higher Performance?

30. $24,400 per Year

31. $29,538,000 per Year

32. 1,000 Times More Money
• Who is More Motivated?
• Who Works Harder?
• Who has a Better Attitude?

34. Compensation Metrics &
Tools
Aligning Incentives &
Strategy
Best Practices

35.  Not to Pay People as
Little as Possible
 Get Maximum
Productivity and Meet
Profit Objectives
 Make this a Shared,
Team Mission
 How Can we Make
This a Win-Win?

36. Give What They
Value Most
Take Away Where
They Value Least

37. 1. Change Variable Comp
Plans Every Year
2. Tweak Account Base /
Territories Every Year
3. Give Thought to
Alignment – Plan
Objectives and Work
Backwards
4. Always Provide New
“Sweeteners” with
Every Change

38. 5. Salary Portion “At
Risk”
6. Space Rewards Every
3-4 Months
7. Not All $$ Equal
1. Pay for “Good $”
2. Low Value = Low $
8. “Targeted
Compensation”
1. Earnings
2. Objectives