Compensation · Executive Compensation

Compensation for bringing a huge client

Adi Krysler Marketing Expert

October 18th, 2017

One of the support engineers in a company has managed to bring on a huge client, one that will completely change the valuation of the company. What is the standard compensation that you think he deserves?

Parvez Husein Co-founder and CTO @ Portable Office Company. Exited.

October 19th, 2017

there are probably many right answer to this...

in my opinion, i think the "fair" thing to do is to compensate the support engineer in just the same way as you would your top sales person if they had bagged the client and smashed their targets. So if that's a % of margin, then thats what the support engineer should get. don't short change it.

the other thing that i would do is "praise" this like crazy ... let it be known through out every corner that the shift in the needle can happen from the most unlikely of places, and that where ever it comes from it will be rewarded fairly and recognised heavily.

hope that helps... :-)

Anton Udov Solutions architect/consultant 10+ years of experience. AWS,Google Cloud,PCF.Java etc. Outsourcing

May 3rd, 2018

There are too little details to provide exact answer. In general, it all depends on company policies and the size of the customer. Some companies pay a fixed amount, e.g. $5000, while others pay percentage of profits for a couple of months, e.g. 10% during first 3 months.

Dane Madsen Organizational and Operational Strategy Consultant

May 3rd, 2018

It depends on the role the person will have in closing and retaining the client. If there is an ongoing role, then a continuing reward will be important (the amount varies by industry and margins). If this is an introduction to a relationship manager tasked with closing and retaining, then a one time reward is normal. If the client relationship is personal to the engineer, and therefore vulnerable to the engineer being happy, you may need to consider an equity relationship that will tie them to your firm and rewards them for the increase in valuation. Be cautious about how you do this in any manner. If the relationship become weaponized, you could see a vulnerability to that valuation. Further, valuations by professional investors are fluid if there is a single client that makes the business, with no strategy how to dilute the vulnerability of them leaving.

David M

May 3rd, 2018

As others have said, too little info. I can tell you I generally contract no less than 10% of sales for these types of situations, and if it is a start up there is equity compensation as well. It depends on his salary, the scope of his compensation, etc. No less than what you would pay any other sales person for sure. And I can tell you, someone said 3 months. Thats a great way to lose a top guy because at month 4 when he sees the company making serious profits off his lead, he is going to lose interest real quick in being loyal. If I knew you had a sales person capable of landing big game changer accounts, and you only compensated him with 10% for three months, I would go after him and tell him "Come work for me where you will be compensated generously as you deserve." For startups, I do no less than 10 years on major deals that make or break companies. And if they are not compensating pre-deal, that number goes up considerably. Again, all depends on the factors. You have to recognize that people who can think big scale and then deliver are RARE. You don't go cheap on these people, you risk erring on being too generous. My experience and subjective opinions of course for what they are worth.

André Pedro Bom I'm a business consultant, startup mentor and entrepreneur.

May 3rd, 2018

There are many good suggestions as well as good practices in previous answers, and probably the best fit would be a combination of them, with adaptation to some extent for your specific situation.

In my opinion, you should consider:

1. Reward policy / comissioning policy: do you have any? if you have a policy already running, you should just apply it. Otherwise, if you don't have a comissioning policy or yours don't cover the present situation, it is a perfect time to address the question and define a general policy considering this case as well potential future cases (which, indeed, must be stimulated).

2. Equity: This is the last thing I would consider in such a situation. I understood that we are talking about compensate a good employee for bringing on a huge client. So, I consider fair, as much as possible, to compensate him or her proportionaly to the margin of the first deal. Consider that bringing the new client is one part of the job, keep the client satisfied all long the client life cicle (including other deals) is another and depends on the entiry company.

3. Time to compensate: it would perfectly aceptable wait the end of the first deal, or cycle of business, for which you should compensate the engineer, then you calculate compensation (as % of profit, limited to this deal or cycle). And you should pay at once. Many payments tend to couse frustration when they cease.

4. Profit Percentage: This is an important issue. From my experience, the bigger the business, the smaller the percentage. At the same time, the more complex the sales process, the higher the percentage. It is not possible to give an accurate answer, you should consider the typical practices of your industry and apply these considerations.

Hope this helps!