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Has the Great Resignation been caused by a silent stagnation in compensation? Let’s compare data from 2010 and 2021 to understand the longitudinal trends in cash and equity compensation. The cash compensation of three executive roles at early-stage companies has increased faster than inflation. The question I haven’t answered is whether compensation at larger companies has materially outpaced startups' raises. MORE
Company Stage Compensation Early Leadership Q&A Resource Type Role / Function TopicsThere’s a lot of stuff written on how much to pay yourself as CEO. Christoph Janz has a great spreadsheet of quantitative thoughts here. MORE
Blog Posts Company Stage Compensation Early Leadership Q&A Resource Type Role / Function TopicsQ: How does a CEO/founder/owner pick their salary? I’ll share my stories. In my first start-up, we raised $9m in our seed round — a large first round, but the times were different. MORE
If you have problems motivating and retaining your top salespeople, you may need to take a closer look at your sales compensation plan. Besides motivating your sales force, a good sales compensation […]. MORE
SaaS Enterprise Sales Compensation Pl an. Blog Posts Company Stage Compensation Hiring Resource Type Role / Function Sales TopicsI’m not ashamed to admit that when I set up our first SaaS sales comp plan, I had no idea what I was doing. MORE
Blog Posts Company Stage Compensation Hiring Human Resources Resource Type Role / Function TopicsIf someone is looking for another job in Year 1, Even if they don’t take it … You’ve already basically lost them. Do more 1-on-1s Get more 360 feedback Talk more. I know you don’t have time. MORE
Another way is to look at the cash based cost of the stock based compensation. The chart above shows the average stock-based compensation (SBC) per employee by years since founding across the basket of publicly traded SaaS companies. In summary, each year the typical public SaaS company spends about $10-20k in stock based compensation per employee. Above, I’ve plotted the median spend on stock-based compensation over the first ten years of each company’s life. MORE
Compensation structures are one of the most interesting questions facing customer success organizations in software startups. How should customer success leaders structure their team’s compensation in order to align the objectives of individual customer success managers with those of the larger business? Like sales compensation plans , customer success compensation plans should evolve to serve the business’s needs. MORE
Blog Posts Company Stage Compensation Early Leadership Resource Type Role / Function TopicsWhen I co-founded my first company, way back in the dark stretch between Web 1.0 and Web 2.0, we got a terrible deal, from a dilution and valuation perspective. MORE
The post What is an equitable way to compensate someone who brings an investor to your start up company? If someone wants to be paid to help you fundraise, pass. VCs will smell it and it will be a negative. But … I think if: someone respected by VCs connects you to a top investor that funds you … because they believe in you, especially if (x) they give you your lead investor, and. MORE
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Almost always, compensation distributions are fixed the moment you sign a term sheet to be acquired (and really, a bit before that). The post When offering equity compensation, what should founders consider to make sure employees benefit fairly from a liquidity event? Bear on thing in mind: You can fix a lot of things in equity later before you sell — if you are still in charge. So you can always grant more equity to someone that outperforms, is promoted, etc. on your watch. MORE
Since 2008, there has been a secular trend to increase cash compensation and decrease equity to startup management teams. In the past 5 years, VPEs have benefitted from a 10 to 16% increase in their cash compensation, but have seen their equity grants fall by 17-19%. Above, I’ve charted the cash compensation trends, (salary+bonus), for the different roles and different locations. MORE
There is no one-size-fits-all formula for designing customer success compensation plans. Each company is unique and has different goals and KPIs in place that affect CS compensation structures. 4 Factors to Consider in Your CS Compensation Plan. MORE
Blog Posts Company Stage Compensation Hiring Resource Type Role / Function Sales TopicsI want to spend a few posts and some time on sales comp plans for early-ish stage SaaS companies (up to say $20m in ARR). MORE
It’s the most provocative idea about employee compensation I’ve found. Today, it’s common for startups and companies of all sizes to refer to compensation surveys that span the 10th percentile to the 90th percentile in compensation for roles, and use these benchmarks provide offers to new hires, inform promotion salary increases and new option grants, and underpin retention packages. In his book describing Google’s People Operations called Work Rules! MORE
Blog Posts Compensation Early SalesQ: What’s a healthy number of deals an Account Executive for a B2B SaaS company be working? How many is too many? Deal size is $4k/yr and sales cycle ~25 days. You can back into it. First, what’s the On Target Earnings (OTE = base + bonus) for the rep? MORE
The ultimate goal of any compensation plan is to ensure account executive success at each stage. Your startup is just getting off the ground. You might have a few account executives and a sales leader in place; maybe some revenue and a handful of customers. The sales team costs real money, and the question before the company is: how do you know what quota plan to assign to the account executives? I’ve seen four stages in early stage software companies. MORE
Blog Posts Compensation LeadershipAfter almost 60,000,000 views on Quora, the top #2, #4, #14, and #17 answers are all about how much money CEOs and founders ma ke. And not just “exit” money but salary. Salary is a means to an end for great founders, nothing more. MORE
In recent years, CS professional compensation structures have tended to rely on revenue-generating activities, which will continue in 2022. As a result, over the past few years, compensation structures have focused on bonuses and other incentives such as stocks and equity options. MORE
Blog Posts CompensationBecause it takes so, so long to make money from it. At least from very early-stage investing. So while not a young person’s game per se, it really helps to start early. It doesn’t take that long in venture to make a decent salary. MORE
It helps you delve into the compensation structure of the customer success managers along with the burning salary trends. CSM Compensation Structure. Or any of the variable elements that can increase the total compensation. MORE
Blog Posts Company Stage Compensation Hiring Human Resources Resource Type Role / Function Topics MORE
There are several different models of compensation plans , but not all can be guaranteed to produce the same results for your organization. What Is a Variable Compensation Plan? These are also called incentive compensation plans. Determine Your Compensation Split. MORE
With increasing focus on grit and many claims of meritocracies in organizations across the country, why does variable pay compensation even exist? On top of that, why are sales people some of the few employees subject to variable compensation structures? What is Variable Pay Compensation Anyway? Variable pay compensation consists of paying employees based on (usually) some fixed “base” salary as well as a variable component based on performance. MORE
In the early years, Hubspot prioritized growth and consequently compensated their sales teams exclusively on new bookings. But after observing some of the initial churn rates of particular customer segments, the company re-emphasized the importance of closing the right customers, and added a churn component to the compensation structure of the sales teams, to ensure that the sales teams were pursuing the right kinds of customers. MORE
Blog Posts Company Culture CompensationQ: What incentives work well to attract new employees to a company, and what ultimately makes them want to stay? The tough part is that things that incent folks to join … don’t really incent them to stay. Not really, at least not in my experience. MORE
A great sales compensation plan needs to accomplish quite a lot. It needs to provide fair compensation to employees in customer-facing roles. The Process for Creating a Sales Compensation Plan. Whether you’re building a sales compensation plan from scratch or re-building an old one, you should take the following steps in order: Understand the Basic Requirements of a Good Sales Comp Plan. Plan Compensation for Onboarding and Training. Capping Compensation. MORE
Blog Posts Company Stage Compensation Leadership Resource Type Role / Function Topics MORE
VP of Sales Compensation Plan. Blog Posts Company Stage Compensation Hiring Resource Type Role / Function Sales TopicsIn SaaS, #1 most common misfire, with a bullet, is the VP/head of sales. In fact, there’s a VC saying that I used to really hate. MORE
There is no one-size-fits-all formula for designing customer success compensation plans. Each company is unique and has different goals and KPIs in place that affect CSM compensation structures. 4 Factors to Consider in Your CSM Compensation Plan. MORE
Their compensation’s not tied to it in the product organizations, but it’s a notional target that I interrogate and expect. Company Culture Compensation Leadership Podcasts Sales dave mcjannet hashicorp MORE
Many founders like to tie compensation to results and like bonuses for overachievers. Blog Posts Compensation Q&AQ: When should you raise the salary of your employees as a startup? A few thoughts to at least think about: Try to pay “market” to all your employees as soon as you can. MORE
Blog Posts Compensation EarlyQ: How should shares in a startup be divided between 4 co-founders? If we have equal shares, what if one of us puts in a cash injection at a later date? You’ve got two good, different questions here. MORE
Multi-Level Marketing (MLM) refers to one of the most popular and common forms of businesses in the industry today. It’s a big business that many Americans and even other countries all over the world are involved. Why is it so popular? Because you’re selling products, at your own flexible time, and with significant earning potential. With their unique MLM pay plan, this is a very attractive form of entrepreneurship. Looking to get a start with MLM? MORE
Developing a compensation philosophy—and doing so sooner rather than later—is one key way to get compensation right. But what exactly is a compensation philosophy, and how do you go about developing one for your startup? . When done well, your compensation philosophy can set the stage for building a more transparent culture and building trust with employees. . What is a compensation philosophy? . How to develop your compensation philosophy . MORE
The post Compensation Cookbook: Designing Comp & Territory Plans from Scratch appeared first on Sales Hacker. Sales Operations Training & Events MORE
Blog Posts CompensationQ: How much equity should a CEO get in a startup? There’s no magical answer, but for venture-backed start-ups, for years VCs have aligned on around 6%-8% equity for a non-founder / outside CEO. As you approach IPO and very late stage, that often goes down. MORE
Blog Posts Compensation Q&AQ: What amount of share options is fair? Boy this is a tough question. Options are rarely worth as much as anyone expects , unless the start-up is worth $10b+. One big problem: the pie only adds up to 100%. That sounds silly, but it isn’t. MORE
158 
There are several different models of compensation plans , but not all can be guaranteed to produce the same results for your organization. What Is a Variable Compensation Plan? These are also called incentive compensation plans. Determine Your Compensation Split. MORE
For example, as Mark Roberge, CRO of Hubspot, wrote in The Sales Acceleration Formula , Hubspot adopted three different sales compensation plans throughout its early evolution which embody the three key ingredients of a sales compensation plan. Hubspot’s journey highlights the three key components of a sales compensation plan: commission ratio, acceleration and payment schedule. Payout timing is the third component of the sales compensation. MORE
Compensation Related Topics The Daily Egg
APRIL 16, 2021
If you have problems motivating and retaining your top salespeople, you may need to take a closer look at your sales compensation plan. Besides motivating your sales force, a good sales compensation […].
Totango
NOVEMBER 10, 2021
There is no one-size-fits-all formula for designing customer success compensation plans. Each company is unique and has different goals and KPIs in place that affect CS compensation structures. 4 Factors to Consider in Your CS Compensation Plan.
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Totango
NOVEMBER 10, 2021
There is no one-size-fits-all formula for designing customer success compensation plans. Each company is unique and has different goals and KPIs in place that affect CSM compensation structures. 4 Factors to Consider in Your CSM Compensation Plan.
TechStars
AUGUST 19, 2019
Developing a compensation philosophy—and doing so sooner rather than later—is one key way to get compensation right. But what exactly is a compensation philosophy, and how do you go about developing one for your startup? . When done well, your compensation philosophy can set the stage for building a more transparent culture and building trust with employees. . What is a compensation philosophy? . How to develop your compensation philosophy .
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Tomasz Tunguz
JANUARY 17, 2022
Has the Great Resignation been caused by a silent stagnation in compensation? Let’s compare data from 2010 and 2021 to understand the longitudinal trends in cash and equity compensation. The cash compensation of three executive roles at early-stage companies has increased faster than inflation. The question I haven’t answered is whether compensation at larger companies has materially outpaced startups' raises.
ChurnZero
SEPTEMBER 10, 2021
There are several different models of compensation plans , but not all can be guaranteed to produce the same results for your organization. What Is a Variable Compensation Plan? These are also called incentive compensation plans. Determine Your Compensation Split.
ChurnZero
SEPTEMBER 10, 2021
There are several different models of compensation plans , but not all can be guaranteed to produce the same results for your organization. What Is a Variable Compensation Plan? These are also called incentive compensation plans. Determine Your Compensation Split.
CustomerSuccessBox
JANUARY 10, 2022
In recent years, CS professional compensation structures have tended to rely on revenue-generating activities, which will continue in 2022. As a result, over the past few years, compensation structures have focused on bonuses and other incentives such as stocks and equity options.
SaaStr
DECEMBER 25, 2021
Blog Posts Compensation LeadershipAfter almost 60,000,000 views on Quora, the top #2, #4, #14, and #17 answers are all about how much money CEOs and founders ma ke. And not just “exit” money but salary. Salary is a means to an end for great founders, nothing more.
SaaStr
JANUARY 4, 2022
Blog Posts Company Culture CompensationQ: What incentives work well to attract new employees to a company, and what ultimately makes them want to stay? The tough part is that things that incent folks to join … don’t really incent them to stay. Not really, at least not in my experience.
|
Sales Hacker
MAY 9, 2019
A great sales compensation plan needs to accomplish quite a lot. It needs to provide fair compensation to employees in customer-facing roles. The Process for Creating a Sales Compensation Plan. Whether you’re building a sales compensation plan from scratch or re-building an old one, you should take the following steps in order: Understand the Basic Requirements of a Good Sales Comp Plan. Plan Compensation for Onboarding and Training. Capping Compensation.
SaaStr
JULY 2, 2019
The post What is an equitable way to compensate someone who brings an investor to your start up company? If someone wants to be paid to help you fundraise, pass. VCs will smell it and it will be a negative. But … I think if: someone respected by VCs connects you to a top investor that funds you … because they believe in you, especially if (x) they give you your lead investor, and.
SaaStr
JULY 22, 2019
Almost always, compensation distributions are fixed the moment you sign a term sheet to be acquired (and really, a bit before that). The post When offering equity compensation, what should founders consider to make sure employees benefit fairly from a liquidity event? Bear on thing in mind: You can fix a lot of things in equity later before you sell — if you are still in charge. So you can always grant more equity to someone that outperforms, is promoted, etc. on your watch.
SmartKarrot
JULY 17, 2020
It helps you delve into the compensation structure of the customer success managers along with the burning salary trends. CSM Compensation Structure. Or any of the variable elements that can increase the total compensation.
SaaStr
JUNE 29, 2021
Company Stage Compensation Early Leadership Q&A Resource Type Role / Function TopicsThere’s a lot of stuff written on how much to pay yourself as CEO. Christoph Janz has a great spreadsheet of quantitative thoughts here.
SaaStr
JUNE 12, 2021
Blog Posts Company Stage Compensation Early Leadership Q&A Resource Type Role / Function TopicsQ: How does a CEO/founder/owner pick their salary? I’ll share my stories. In my first start-up, we raised $9m in our seed round — a large first round, but the times were different.
SaaStr
FEBRUARY 22, 2021
Blog Posts Company Stage Compensation Leadership Resource Type Role / Function Topics
Sales Hacker
DECEMBER 12, 2017
With increasing focus on grit and many claims of meritocracies in organizations across the country, why does variable pay compensation even exist? On top of that, why are sales people some of the few employees subject to variable compensation structures? What is Variable Pay Compensation Anyway? Variable pay compensation consists of paying employees based on (usually) some fixed “base” salary as well as a variable component based on performance.
SaaStr
FEBRUARY 11, 2021
VP of Sales Compensation Plan. Blog Posts Company Stage Compensation Hiring Resource Type Role / Function Sales TopicsIn SaaS, #1 most common misfire, with a bullet, is the VP/head of sales. In fact, there’s a VC saying that I used to really hate.
SaaStr
JUNE 3, 2021
Blog Posts Company Stage Compensation Early Leadership Resource Type Role / Function TopicsWhen I co-founded my first company, way back in the dark stretch between Web 1.0 and Web 2.0, we got a terrible deal, from a dilution and valuation perspective.
SaaStr
MAY 25, 2021
Blog Posts Company Stage Compensation Hiring Human Resources Resource Type Role / Function Topics
SaaStr
OCTOBER 11, 2020
Blog Posts Company Stage Compensation Hiring Human Resources Resource Type Role / Function TopicsIf someone is looking for another job in Year 1, Even if they don’t take it … You’ve already basically lost them. Do more 1-on-1s Get more 360 feedback Talk more. I know you don’t have time.
SaaStr
FEBRUARY 23, 2021
Blog Posts Company Stage Compensation Hiring Resource Type Role / Function Sales TopicsI want to spend a few posts and some time on sales comp plans for early-ish stage SaaS companies (up to say $20m in ARR).
SaaStr
JANUARY 4, 2021
Blog Posts Compensation EarlyQ: How should shares in a startup be divided between 4 co-founders? If we have equal shares, what if one of us puts in a cash injection at a later date? You’ve got two good, different questions here.
Tomasz Tunguz
JANUARY 4, 2016
It’s the most provocative idea about employee compensation I’ve found. Today, it’s common for startups and companies of all sizes to refer to compensation surveys that span the 10th percentile to the 90th percentile in compensation for roles, and use these benchmarks provide offers to new hires, inform promotion salary increases and new option grants, and underpin retention packages. In his book describing Google’s People Operations called Work Rules!
Tomasz Tunguz
JUNE 10, 2015
Compensation structures are one of the most interesting questions facing customer success organizations in software startups. How should customer success leaders structure their team’s compensation in order to align the objectives of individual customer success managers with those of the larger business? Like sales compensation plans , customer success compensation plans should evolve to serve the business’s needs.
SaaS Metrics
MAY 28, 2019
Multi-Level Marketing (MLM) refers to one of the most popular and common forms of businesses in the industry today. It’s a big business that many Americans and even other countries all over the world are involved. Why is it so popular? Because you’re selling products, at your own flexible time, and with significant earning potential. With their unique MLM pay plan, this is a very attractive form of entrepreneurship. Looking to get a start with MLM?
SaaStr
JULY 22, 2020
SaaS Enterprise Sales Compensation Pl an. Blog Posts Company Stage Compensation Hiring Resource Type Role / Function Sales TopicsI’m not ashamed to admit that when I set up our first SaaS sales comp plan, I had no idea what I was doing.
SaaStr
APRIL 4, 2021
Blog Posts Compensation Early SalesQ: What’s a healthy number of deals an Account Executive for a B2B SaaS company be working? How many is too many? Deal size is $4k/yr and sales cycle ~25 days. You can back into it. First, what’s the On Target Earnings (OTE = base + bonus) for the rep?
Tomasz Tunguz
APRIL 28, 2014
Since 2008, there has been a secular trend to increase cash compensation and decrease equity to startup management teams. In the past 5 years, VPEs have benefitted from a 10 to 16% increase in their cash compensation, but have seen their equity grants fall by 17-19%. Above, I’ve charted the cash compensation trends, (salary+bonus), for the different roles and different locations.
SaaStr
MAY 28, 2020
Blog Posts CompensationQ: How much equity should a CEO get in a startup? There’s no magical answer, but for venture-backed start-ups, for years VCs have aligned on around 6%-8% equity for a non-founder / outside CEO. As you approach IPO and very late stage, that often goes down.
Tomasz Tunguz
MAY 12, 2015
In the early years, Hubspot prioritized growth and consequently compensated their sales teams exclusively on new bookings. But after observing some of the initial churn rates of particular customer segments, the company re-emphasized the importance of closing the right customers, and added a churn component to the compensation structure of the sales teams, to ensure that the sales teams were pursuing the right kinds of customers.
SaaStr
JUNE 12, 2020
Many founders like to tie compensation to results and like bonuses for overachievers. Blog Posts Compensation Q&AQ: When should you raise the salary of your employees as a startup? A few thoughts to at least think about: Try to pay “market” to all your employees as soon as you can.
Tomasz Tunguz
NOVEMBER 24, 2018
The ultimate goal of any compensation plan is to ensure account executive success at each stage. Your startup is just getting off the ground. You might have a few account executives and a sales leader in place; maybe some revenue and a handful of customers. The sales team costs real money, and the question before the company is: how do you know what quota plan to assign to the account executives? I’ve seen four stages in early stage software companies.
SaaStr
APRIL 4, 2020
Blog Posts CompensationBecause it takes so, so long to make money from it. At least from very early-stage investing. So while not a young person’s game per se, it really helps to start early. It doesn’t take that long in venture to make a decent salary.
Tomasz Tunguz
FEBRUARY 1, 2015
Another way is to look at the cash based cost of the stock based compensation. The chart above shows the average stock-based compensation (SBC) per employee by years since founding across the basket of publicly traded SaaS companies. In summary, each year the typical public SaaS company spends about $10-20k in stock based compensation per employee. Above, I’ve plotted the median spend on stock-based compensation over the first ten years of each company’s life.
Tomasz Tunguz
MARCH 29, 2015
For example, as Mark Roberge, CRO of Hubspot, wrote in The Sales Acceleration Formula , Hubspot adopted three different sales compensation plans throughout its early evolution which embody the three key ingredients of a sales compensation plan. Hubspot’s journey highlights the three key components of a sales compensation plan: commission ratio, acceleration and payment schedule. Payout timing is the third component of the sales compensation.
SaaStr
AUGUST 17, 2020
Blog Posts Compensation Q&AQ: What amount of share options is fair? Boy this is a tough question. Options are rarely worth as much as anyone expects , unless the start-up is worth $10b+. One big problem: the pie only adds up to 100%. That sounds silly, but it isn’t.
SaaStr
SEPTEMBER 23, 2020
Their compensation’s not tied to it in the product organizations, but it’s a notional target that I interrogate and expect. Company Culture Compensation Leadership Podcasts Sales dave mcjannet hashicorp
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