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  1. #1

    Default New Changes in Compensation and the Impact on In-Progress Deals and Commission

    State of Massachusetts

    I have been a commissioned salesperson employed at-will for the last three years. Myself and one other salesperson replaced the previous sales team. We have since quadrupled revenue in our department. We've been recognized very publicly by the company's top executives as its top performers bringing in the lion's share of revenues and breaking company records by a wide margin. In fact, we've created the only highly profitable department within the company.

    Behind closed doors is a different story. It appears our commission, especially this past year, has attracted the wrong type of attention. Last year I frequently found myself worried that our performance was "too good" within a company that has a history of replacing top performers (in other areas of operation) with low paid replacements of average ability. We have exceeded the salaries of more than one executive at the company.

    Recently, just two days after an all hands company meeting in which the CEO thanked us for our exceptional performance and contributions, we were asked to attend a meeting about our compensation. In the meeting we were told that despite our performance and the company's record-breaking profits, they planned to reduce our commission significantly effective February 2013. I won't bore you with the details of the exchange. They couldn't explain why a reduction was necessary other than to point to the "industry average" for our roles and their desire to align themselves with it. Average we are not. We suspect that they are planning to do what they've done elsewhere in the company: replace top talent with low paid resources believing they'll get the same level of performance and results.

    In any case, less than a week later we were privately informed by several other managers that the CEO had approached each of them asking for details about precisely what it is that we do. Shortly after that we received our new compensation documentation containing a statement that if they let us go, they are only obligated to pay commission for sales that are closed within 30 days of our departure. They expect us to sign these documents as soon as possible.

    We currently have a significant (near six figure) amount in commissions due to each of us under the current compensation plan. Many of the deals are done meaning we've done all of the legwork and drawn up all of the paperwork and the deals await final sign-offs, but are not yet officially considered "closed". Our concern is that management may be hoping to let us both go and then delay any remaining closings long enough to minimize the amount of commission paid out.

    What are our rights with regard to commissions and the conduct of our employer? If we sign the new compensation plan will it apply to deals that were started but not yet closed under the previous plan? Clearly we need to find a more savvy employer that value and rewards top performance, but right now our concern lies with this push to have us sign a new compensation plan, and the potential consequences.

    Thank you for taking the time to read.

  2. #2
    Join Date
    Jun 2006

    Default Re: New Changes in Compensation and the Impact on In-Progress Deals and Commission

    I can't read your agreement, either the old one or the new one, from here.

    Suggest you take both to a local attorney who can.

  3. #3
    Join Date
    Sep 2011

    Default Re: New Changes in Compensation and the Impact on In-Progress Deals and Commission

    The company has the right to modify compensation going forward. They also have the right to terminate you. Prior commission compensation, unless contractually spelled out, can be modified also. You have my sympathy, I worked for a company that cut my compensation over 40% for the same reason.

  4. #4
    Join Date
    Apr 2007
    Il.(near StL,Mo.)

    Default Re: New Changes in Compensation and the Impact on In-Progress Deals and Commission

    Any time a written agreement/contract is involved, your best bet is to always take it to a local employment or contract attorney for review & advice.

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