1. FY <xx> Presented <date>
Sales Incentive Plan
FY <xx>
Presented <date>
<Company Name/Logo Here>

2. <Company>’s Strategic Imperatives
The basic components of the business strategy point to a key role for the sales team
<Company>’s Strategic Imperatives
List the 3-5 things the entire company must accomplish in the next few years to meet its objectives in the marketplace – examples are…
Develop xx product line to serve yy by zz
Expand sales presence into xx (geographic area)
…industry vertical focus?...
…value proposition?...

3. The sales team is central to executing the strategy
What Sales need to do
to help maintain domestic market share
List specific objectives for the sales organization …

4. Incentive Plan Measures
Key accountabilities of the sales and sales management roles are directly linked to the new incentive plan measures
Roles
Key Accountabilities
Incentive Plan Measures
<Role Name 1> …
<Role Name 2>

5. Plan Overview: <Role Name> Details for each component are shown on the following pages
Total Compensation =
Base
Salary +
<highest weight component>
<2nd highest weight component>
<etc.>
Weighting
<50%>
<30%>
<20%>
Annual
Incentive Target
<$10,000>
<$6,000>
<$4,000>
Timing
<Quarterly>
Overview
<Incentive based on overall percent goal attainment for Gross Margin vs. quarterly goal for all direct reports>
<Incentive based on percent goal attainment for overall business unit performance vs. annual Gross Margin goal>
<Bonus based on the percent of Account Managers reporting to the Sales Manager who are at or above goal on Individual Gross Margin for the quarter>
Caps
<Uncapped>
<Capped at $9,000 per year>
<Capped at $2,000 per quarter>

6. Role: <Role Name> Component: <First Component>
Total Compensation =
Base
Salary +
<First Component>
<Second Component>
<Third Component>
Rationale
<Why is this incentive offered?>
Measurement and calculation
<Definitions and verbal description of the measure – may refer to payout table on following page> …

7. Role: <Role Name> Component: <First Component>
Show payout table and calculation steps – example provided (table pasted in from Excel)
Total Compensation =
Base
Salary +
<First Component>
<Second Component>
<Third Component>
Sales Manager
Sales Team Gross Margin Bonus
Payout Table
Example Calculation
Step 1: Determine Actual Quarterly Performance % Goal
Consider a Sales Manager with a goal of $3,000,000 in Sales Team Gross Margin for Q1, and actual results of $3,300,000
Actual% Goal = $3,300,000/$3,000,000
= 110%
Step 2: Look up the Actual Quarterly Performance % Goal in the payout table
For 110% goal performance, the quarterly payout is $3,333
Actual Quarterly Performance % Goal
Quarterly Payout
Over 115%
$3,750 + $42 per percentage point over 115% of goal
115%
$3,750
110%
$3,333
105%
$2,917
100%
$2,500
95%
$2,188
90%
$1,875
85%
$1,563
80%
$1,250
Below 80% $0

8. <Measure> goals will be determined using a consistent process
Explain the goal setting process (timing, involvement, criteria)

9. If applicable – simple plans may not need an earnings calculator
An Earnings Estimation Calculator will be provided to speed your understanding of the new plan
Screen shot here

10. “Translate” the comp plan into a clear message about what the sales person needs to do to “win” – Example provided
The greatest rewards will go to those who exceed their Gross Margin goals
Focus on profitable accounts and opportunities
Maintain high service levels and ensure customers are satisfied with the entire experience of buying from <company>
Kill bad business
If an account or opportunity cannot be serviced profitably, walk away
Focus on premium products
Represent the entire company product line to assigned accounts, including those outside your business unit
Add value with customers by sharing market insights, offering premium products, and meeting needs for specialized capabilities
Run it like you own it