Sample Software Account Executive Compensation Plan Template
i Account Executive Compensation Agreement
Revision Date: ii__________
This document describes the agreement between iii ______________ _
(“Company”) and iv (“Account Exec”) regarding terms related to compensation.
Company and Account Exec enter into this agreement whereby Account Exec provides sales services to the Company in return for compensation specified in this agreement.
Duration:
This agreement covers the period starting from v and ends on
.
All commissions will be calculated and paid once every month, for the preceeding month. Commissions will be calculated and paid out as part of the next payroll cycle, following the month for which commissions are calculated.
Base Pay:
viAccount Exec is due a base salary of vii , payable every viii_______________.
Sales Compensation:
Targeted sales compensation for the full year is ix ________. The sales compensation is not capped.
Other Compensation:
Account Exec will be paid for all travel and lodging expenses related to sales activities. Auto travel will be reimbursed at the current federal reimbursement rate (Currently $0.45 cents per mile).
Account Execs will be required to maintain a cell phone as part of conducting sales business. Account Exec will be provided an allowance of $50 per month for cell phone usage.
Client entertainment expenses will be reimbursed as following:
Meals: Reimbursable with receipts.
Special Events: Must be pre-approved. Reimbursable with receipts.
Expenses will be reimbursed within _30 days of being presented with the receipts and a completed expense reimbursement form.
xSoftware License Sales Commission
Quota:
Account Exec has a quota requirement of xi_ in Software Sales Revenue for the full year.Sales Credits:
Sales Commission is paid to the Account Exec based on the Gross Profit of the following products:xiiSoftware Product 1 Unit Cost = $5,500.00
Software Product 2 Unit Cost = $350.00
Software Product 3 Unit Cost = $35,000.00
Account Exec earns commissions only when an invoice to the customer is completely paid.xiii
Sales Revenue minus Tax and Shipping charges are credited to the Account Exec and compared to the Quota.
Calculation:
Sales credits are accumulated and compared against the annual quota. Based on the percentage of quota achievement a different sales commission percent is applied against the current sales revenue and commission amt is calculated.
Commission Tiers
Quota Achievement Commission Rate
0% to 79.99% 3%
80% to 99.99% 5%
100% to 149.99% 7%
150% and above 10%
Example:
Assuming Account Exec has a goal of $100,000 and in the first month completes the following sales- Invoice1 Gross Profit = $60,000
Invoice2 Gross Profit = $30,000
Commissions will be calculated as follows:
Invoice 1
$60,000 at 3%
= $1,800
(Is in the first tier)
Invoice 2
$30,000
= $1,100
(Crosses two tiers)
$20,000 at 3% = $600 (this portion is in the first tier)
$10,000 at 5% = $500 (this portion is in the second tier)
Total Commission: ($2,900)
xivServices Commission
Quota:
Account Exec does not have a quota for this Commission.
Sales Credits:
Sales Commission is paid to the Account Exec based on services invoiced:
Service Product 1
Service Product 2
Account Exec earns commissions only when an invoice to the customer is completely paid.xv
Calculation:
Sales credits are accumulated and paid at a standard 2% of Revenue.
Example:
Assuming the following services in the month – Invoice1 $8,000
Commissions will be calculated as following:
Invoice 1 $8,000 $8,000 X 2% = $160 (Commission)
xivMaintenance and Support Commission
Quota:
Account Exec does not have a quota for this Commission.Sales Credits:
Sales Commission is paid to the Account Exec based on the revenue from the Maintenance & Support contract invoiced:
Maintenance & Support Contract
Revenue is for new contracts only, not renewals. Account Exec earns commissions only when an invoice to the customer is completely paid. xv
Calculation:
Sales credits are accumulated and paid at a standard xvi 5% of Revenue.
Example:
Assuming the following services in the first month – Invoice1 $8,000
Commissions will be calculated as following:
Invoice 1 $8,000 $8,000 X 5% = $400 (Commission)
Quarterly New Sales Bonus
Quota:
Account Exec has a quota requirement of xvii of new sales revenue for the quarter.
Sales Credits:
Sales revenue can be product or service sales. Sales have to be made to brand new customers. Account Exec earns commissions only when an invoice to the customer is completely paid.xviii
Sales Revenue minus Tax and Shipping charges are credited to the Account Exec and compared to the Quota.
Calculation:
Sales credits are accumulated and compared against the quarterly quota. If the quota is exceeded, Account Exec gets a quarterly bonus of $5,000.
Example:
Assuming Account Exec has a quarterly goal of $50,000.
If Account Exec makes $45,000 in Quarterly New Sales, then Account Exec does not get any bonus.
If Account Exec makes $55,000 in Quarterly New Sales, then Account Exec gets the bonus of $5,000.
President’s Club
On achievement of 125% of the annual quota for the main sales commission incentive, Account Exec will join the President’s club. President’s club members will be invited to the annual sales meeting trip held in the first quarter of the next year.
Draw
During the first three months of employment with the company, the Account Exec is provided a recoverable draw of $2,500 per month. The draw balance will be recovered as soon as possible from future earnings.
Cap
There is no cap on any payouts to the Account Executive
Termination of Employment
On voluntary or involuntary termination of Sales Rep employment with the Company, commissions will be paid on transactions dated prior to the termination date only. Any amounts owed to the Account Exec will be according to employment regulations after withholding taxes and other dues.
Other Terms
1. Account Exec agrees to follow all Federal and Local laws while engaged in providing services to the Company during the period of this agreement.
2. Account Exec shall not engage in any other employment during the term of this agreement. Company reserves the right to require Sales Rep to terminate any such other employment at Company’s sole discretion.
3. Account Exec shall use the most ethical practices while engaging in any sales activity.
4. Account Exec agrees to protect all confidential material including prospect data, sales data, and client information belonging to the Company and shall take all reasonable care in making sure that such confidential material is not disbursed to anyone outside the company.
5. This entire agreement shall be governed by the laws of the State of _ .
Company Account Exec
_________ _________
By By
_________ _________
Name Name
_________ _________
Date Date
i Any part of this document can be changed or overridden based on your needs.
ii This date will give us information as to when this agreement was written and distinguish it from similar other agreements.
iii Fill out the company name here.
iv Fill out the sales person’s full name here.
v Enter the start and end date for the sales commission plan effective period. Most companies use the calendar or fiscal year start and end dates for these values. Some companies may not have an end date specified.
vi Alternatively you can remove this section or phrase it such as “Base Salary is specified in a separate employment agreement.
vii Amount of base every payable period.
viii Weekly, Bi-weekly, Twice-monthly, Monthly, etc
ix If there is a targeted compensation for the full year, it can be entered here. Alternatively, this whole section can be removed.
x This incentive encourages higher levels of software license sales, by paying higher commissions when the quota is exceeded.
xi Enter quota amount here. It could be setup to be a monthly or quarterly quota. It is also possible to not have a quota at all.
xii Replace with appropriate products or product families. Alternatively, replace products with customers or types of business.
xiii Alternatively commission can be due on invoicing or shipping of goods or other events.
xiv This incentive provides commission to the Account Exec on maintenance and support contract sales.
xv Alternatively commission can be due on invoicing or shipping of goods or other events.
xvi Commission rate can either be a flat rate or be based on a tier.
xvii Enter quota amount here. It could be setup to be a monthly or quarterly quota. It is also possible to not have a quota at all.
xviii Alternatively commission can be due on invoicing or shipping of goods or other events.
