Comp Plan for 1st Business Development Exeuctive/Chief Revenue Officer

Craig Brenner

November 20th, 2013

Would be great to hear if anyone has any experience or suggestions on the below compensation plan for our first business development executive who will join our senior leadership team as the Chief Revenue Officer (CRO). I know people will ask so just here is some background on the company stage, market, and business development/sales executive experience:

  • 2.5 year old business
  • Enterprise SaaS software in the Retail space (also hardware POS elements)
  • Have 2 small regional pilot customers outside the US in place with some early but nominal revenue
  • Raised $4M, will raise another $5M sometime in 1H’14
  • 25 current employees
  • Currently CEO and COO are handling business development
  • This business development executive will be responsible for opening new geographic markets and establishing strategic relationships with new customers for pilots in the US and Europe
  • This executive has 25 years of very relevant experience
  • Initially this Business development executive will be solely responsible for developing the first 3-5 strategic customer relationships in these new geographies
  • We want a “hunter” renaissance business development executive  not a “Farmer” coin-operated  sale executive during this initiation phase (focused on learning as much as they can about how customers will use the product to support engineering, product marketing, and marketing communications not distracting with generating with generating short-term revenue)
  • Revenue recognition likely 8-12 months after Business development executive starts with the hope of adding 12 customers in 2014
  • 2-4 team members added over 2014

Here is an outline of the compensation plan we are considering for this executive. Would love to hear feedback if this is looks like a reasonable comp plan and any suggestions or red flags you might have:

Pre Revenue (Initial 8-12 months?)


  • Proposed Pre Revenue Base Salary:  Market Salary (higher end)
  • Annual Base increase:    10% - 15%
  • Proposed Pre Revenue Bonus: 100% of base
  • Bonus  payment: Quarterly
  • Proposed Pre Revenue Commission: 0%
  • Commissions payment: Quarterly
  • Sign on Equity: 5%

Post Revenue Recognition (no team)


  • Post Revenue Base Salary: Increasing annually
  • Annual Base increase: 10% - 15%
  • Proposed Post Revenue Bonus: 20% - 40%  of base
  • Bonus  payment: Annual
  • Proposed Post Revenue Commission: 10%- 20% of net sales w/performance thresholds
  • Commissions Cliff: TBD
  • Commissions Cap: No Cap
  • Commissions payment: Quarterly
  • Incremental Equity: tied to long-term KPIs

Post Revenue Recognition (Team)


  • Proposed Post Revenue Base Salary: Increasing annually
  • Annual Base increase: 10% - 15%
  • Proposed Post Revenue Bonus w/team: 50-75% of base (tied to team performance and long-term company KPIs)
  • Bonus  payment: Annual
  • Proposed Individual  Post Revenue Commission (based on team performance): 3%- 7% override on net sales w/performance thresholds
  • Proposed Team Post Revenue Commission: 7%-  13% of net sales w/performance thresholds
  • Commissions Cliff: TBD
  • Commissions Cap: No Cap
  • Commissions payment: Quarterly
  • Incremental Equity: tied to long-term KPIs


Michael Brill Technology startup exec focused on AI-driven products

November 21st, 2013

One thing that's not clear is whether you have figured out how to sell what you have. It sounds like you're pre-revenue and have 2 small pilots. What you're working on is a huge, huge opportunity... but it also seems that retailers will be *really* cautious about fundamental changes in the customer experience (until Apple and a few others do it and then all of sudden your phone won't stop ringing!) so there will be a lot more pilots than deployments for the next year or so. And I imagine there's a bit of a land grab feel so I understand the urgency to start getting customers doing pilots.

What's not clear to me is what you're looking for. You call them a chief revenue officer, biz dev executive, sales executive... you also mention you want a "hunter" but in the same sentence you seem to want them to focus on market intelligence and even a bit of product management. "Hunters" are animals that track down prospects and get contracts signed. They are coin-operated entities and they get shit done. Hire a 25 year sales executive with a zero revenue goal and just have them focus on gaining a better understanding of the market ? I dunno, I would think for the stage of your company that'd be a great job for the CEO and a product manager... hire an animal sales person if you just want someone to generate leads. But my concern (again with little info) is that you hire a senior sales exec and the first thing they do is convince you to hire a couple of sales people to get scale and now you're isolated from actual customer environment and everything comes through the filter of people who have nowhere near the passion and expertise that you have. What looks like help ends up being blinders.

OTOH, if you already know how to sell this product then hire someone ASAP because there will be more than one billion dollar company that comes out of this shift in retail. Very exciting space!

Rob G

November 21st, 2013

Craig; this is a complex subject as i'm sure you know.  a few random questions:

1. will this person start out managing a sales/biz dev team that is currently in place or as an individual contributor expected to hire sales and biz dev team? - you have 25 employees currently, are any of them in sales or business development? 

2. what is a "commissions cliff"? 

3. without giving up proprietary info, what is does the 1, 2, 3 and 5 year revenue plan look like?  feel free to message me directly.  This is important.  in simplest terms the job of the CRO is to generate revenue and thereby build value for the company with the expectation of creating both short-term and long-term value for his/her self. Beyond connecting with you and the team and your vision this individual will go straight to the numbers to way their opportunity costs - you hope they do because you want an individual focused on the revenue numbers. They will do some relatively simple math to figure out if they believe they, with the help of the current team and the team they (presumably) will hire, can make a short-term living and hit a long-term home run. That of course is to a significant extent tied to the norms for your industry - SaaS in the retail space. So for example, if the 'norm' in your industry is that a VP of sales makes a $150k base and a total comp at target of $400k, then when you back into your revenue forecasts do the numbers add up? 

4.  you seem to have quite a bit of experience in sales/biz dev yourself so you know that comp plans not only need to focus on incenting  behavior that you want, but also preventing behavior that you don't want. 

5. Not sure i would spell out annual base increases in the plan at this stage.  i think i would simply address that in annual reviews.  The BOD may want input to exec comp too.