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New Business Commission Structure

Hi Everyone,

I'm looking for different ways to handle new business commission structures. Any input would be appreciated. I have an AE who is now salaried. His position will be changing to 90% new business efforts. I'm trying to come up with a fair commission/bonus plan, in addition to his existing salary.

Thanks!

Denise Acosta Dailey Marketing Group

We do mixed compensation (fixed and variable). That is, a low base and a reasonable commission percentage revenue generation.

Barry J. Owens Controller MAI Sports, Inc.

Denise, I have seen many different new business compensation packages, and all of them have worked nicely. It all depends on how the rest of your compensation is structured, as well as on the individual. The scenarios are as follows:

- Straight salary - Salary plus commission - Draw vs. straight commission - Salary to goal, then a one-time bonus for meeting goal (and reach if applicable)

Whenever commission enters the compensation picture, I have often seen situations where commission is CALCULATED AND ACCRUED, but never actually paid until the client pays. This keeps everyone honest. Hope that helps.

Terry L. Jones, Jr. Controller Harvey and Daughters, Inc.

I actually just finished putting together a fairly extensive, but I believe fair and effective new business compensation model that I would be happy to share with you. If your interested, give me a call.

David Tracht Full Circle Prouctions 404 256 4083

We have an employee who functions in both the marketing and project management aspects of our studio, so her compensation structure is based on this reality. She earns a decent base salary (she's been with us for over 14 years, so she's earned it!), and then commission on NEW business -- AFTER THE CLIENT HAS PAID -- as follows: 2% of AGI (Agency Gross Income, not on mark-ups) during the first 12 months; 1% of AGI in the 13 - 24 month range, and then zero after that.

Hope this helps somewhat.

Kay Rosburg, V.P., Dever Designs