Dear SaaStr: What Would Be a Fair OTE for a VP Sales With a $1M quota?

Q: Dear SaaStr: What Would Be a Fair OTE for a VP Sales With a $1M quota?

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Let me step back. I don’t think it makes any sense for a VP of Sales to have a $1m quota. Why?

So let’s back up.

  • A real VP of Sales probably is going to have an ARR/bookings quota for the entire year. I.e., if you want to hit $3m ARR or $2m in new bookings by 12/31 of next year, that’s her “quota”.
  • Then, back into an appropriate comp plan to hit it. If she needs to make $250k for it to work, then perhaps the comp plan is 125k base / 125k bonus paid out for hitting $3m ARR by next year.
  • And importantly, note you are going to have to pay this OTE on top of what you pay the reps themselves. Yes, sales is going to get more expensive as you scale. A lot more expensive.

(an updated SaaStr Classic answer)

Published on August 14, 2021

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