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Verizon Sales Compensation Plans Overview for Frontier

Verizon Sales Compensation Plans Overview for Frontier. Agenda. Transition from Enterprise & SMB to Spinco Target Compensation and Pay Mix Performance Measures Measurement period / pay frequency Payout Mechanics Policies Monthly maximum commissions Partial months New hire draw.

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Verizon Sales Compensation Plans Overview for Frontier

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  1. Verizon Sales Compensation PlansOverview for Frontier

  2. Agenda • Transition from Enterprise & SMB to Spinco • Target Compensation and Pay Mix • Performance Measures • Measurement period / pay frequency • Payout Mechanics • Policies • Monthly maximum commissions • Partial months • New hire draw

  3. Transition from Enterprise & SMB to Spinco • VZ will move sales personnel from the Enterprise and SMB groups to Spinco, effective April 1 • Sales comp plans are different in Enterprise and SMB • Enterprise revenue is based on TBR; SMB is based on RBR • The segments use different revenue and sales reporting databases • Commission-eligible product sets vary • Segments use different systems to administer the sales comp plans • Spinco will have one set of consistent plans and systems to support the business • Comp plans have been designed for Spinco; overview in this material • Sales and revenue reporting will be consolidated and consistent for all Spinco • Commission-eligible product lists have been combined • All Spinco sales comp plans will be administered using the CA$H system

  4. Target Compensation and Pay Mix • Sales jobs • Sales Director 60/40 • Sales Manager 60/40 • Account Executives 60/40 • Telephone Account Manager 60/40 • Inside Sales Representative 60/40 • Sales Engineering • SE Director 70/30 • SE Manager 75/25 • Sales Engineer 75/25

  5. Performance Measures • Plans are based on two types of performance measures • Revenue; credited monthly • Transactional Sales; credited at time of sale • Monthly Recurring Sales • Renewals • Revenue • May be RBR or TBR; final decision pending • Monthly Recurring Sales (MRS) • Includes services billed on a monthly basis; based on list of eligible product codes • Sales credit based on pre-determined estimated monthly charges, by product code • New and incremental sales only • Renewals • Only applies to one job: Telephone Account Manager (Pooled) • Includes renewals of monthly recurring service contracts

  6. Performance Period and Payout Frequency • All performance measures are calculated on a cumulative Year-To-Date basis • Each month’s quota is the summation of all prior months and current month • Each month’s results are the summation of all prior months and current month • For example • All plans are paid monthly • Sales components are paid one month in arrears (January results are paid in February) • Revenue is paid two months in arrears (January results are paid in March)

  7. Payout Mechanics • All components are paid using a formula bonus • Payouts are based on % of YTD quota achieved • Payouts are calculated based on % of YTD target incentive • Revenue & MRS are paid using a payout table / formula • No pay below threshold • Payout rate between threshold and 100% • For example: 2% of target incentive per 1% of quota attained between threshold and target • Rate accelerates above 100% • Rate decelerates, but does not have a cap • MRS decelerates after reaching 300% of target incentive • Revenue decelerates after reaching 250% of target incentive • Payout formulas vary depending on specific comp plan • Renewals are paid on a straightline basis • Quota attainment % = payout % • No threshold; pay from first dollar • No acceleration above 100%; uncapped

  8. Pay Table Examples

  9. Policies – Maximum Monthly Advances • Monthly limits apply to advances on all Revenue & MRS • Helps reduce rep chargebacks • Manages volatile earnings through the year • Note: For WVA employees, VZ will provide a file with YTD results for WVA modules

  10. Policies – Partial Months • For months in which an employee is in position for less than the full month • Target incentive and quotas are pro-rated based on the number of working days the employee is in the position • MRS & Renewals: • Sales credit is given for all results during the days the employee is in the position • Revenue: • If the employee is in the position on the 15th of the month, employee receives 100% Revenue credit for the full month • If the employee is not in the position on the 15th of the month, employee does not receive Revenue credit for the month. Employee receives a pro-rated draw for the period in position

  11. Policies – New Hire Draw • New hires receive 100% non-recoverable draw for the first two performance months they are in position • MRS is paid one month in arrears, so draw is paid in months 2 & 3 • Revenue is paid two months in arrears, so draw is paid in months 3 & 4 • Example: • Assume a new hire comes on board in March with $30,000 annual target incentive • Their comp plan is based on 60% MRS & 40% Revenue

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