How much do top tech companies structure their sales compensation plans? The answer, it turns out, can vary widely.
We analyzed the compensation packages at tech companies known to be aggressively hiring salespeople. Rainmaker already compiled a list of tech companies hiring lots of salespeople, which we verified by looking at whether the company posted job ads for salespeople.
We restricted our analysis to companies that have recorded a significant amount of sales packages on Glassdoor to get rid of outliers.
All data is for salespeople located in the U.S. We gathered data for only direct sales positions such as account executive or sales executive. Management titles such as VP of Sales were excluded.
Using data from Glassdoor, we were able to take a deeper look at how salespeople get compensated. Some of our key findings:
- Compensation can vary wildly between different tech companies
- Smaller, private companies may pay slightly better than larger, public companies
- Top salespeople make much more than the average salesperson
- There is no correlation between Glassdoor rating and total compensation
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Total Sales Compensation Plans Vary Widely (Data from Glassdoor)
Note: In our data in this article, average total compensation doesn’t equal average base pay and average incentive pay combined. That’s because Glassdoor appears to normalize their data to account for outliers. We will take a further look at outliers later on.
When we looked at the average total compensation at these tech companies, we saw how varied compensation can be for salespeople. The top company, Apptus, paid nearly twice as well as the lowest paying company in the list, Talkdesk.
The data was recorded over the past few years, so the numbers should be up-to-date as of the creation of this article.
On a related note, even though Salesforce recently bought Mulesoft (in May), we listed the companies separately since almost all of the compensation packages happened before the acquisition.
For the most part, base pay made up a strong majority of the compensation packages, but there were some exceptions. In Cisco Meraki and Zendesk, nearly half of compensation came from incentives.
While we did see various forms of non performance-based compensation (like stock), the vast majority of incentive pay came from direct commissions.
Consider that Salesforce and Oracle are both huge public companies with large amounts of salespeople. Yet, a typical salesperson makes $17,000 more per year at Oracle than at Salesforce.
Another interesting trend is how higher base salary is correlated to higher additional pay. From the companies in this data set, it seems the salespeople who earn the most per year tend to be the ones who receive higher base salaries—rather than those with more incentives.
The better you are at sales, the more guaranteed money a company is willing to pay. Conversely, the companies that aren’t as reliant on sales can pay less performance-based pay, since they aren’t willing to pay for top talent.
Smaller, Private Companies Seem to Pay Slightly Better than Large, Public Companies
A common decision for salespeople who are looking for a job in tech is whether to join a smaller, fast-growing company, or a larger, more established company. To find out which might lead to higher compensation, we split our companies into private versus public and averaged the total compensation packages.
We saw that the smaller, private companies tended to pay more on average. But, you have to remember that averages don’t tell the whole story.
Both Copper and Tibco are private companies, yet Tibco pays $50,000 more per year on average. Likewise, Salesforce recently purchased Mulesoft, so both are listed as public companies on our list. Yet, Mulesoft pays $30,000 more per year on average.
All Companies Pay the Best Salespeople Significantly More
When we look at the highest and lowest compensation packages that Glassdoor recorded, we saw how significantly salesperson compensation can vary at a single company.
Zendesk and Apptus are outliers since they have each recorded a salesperson who made over $800,000 in commission. That actually isn’t surprising as there are software salespeople who have made over 1 million in a year.
We made this chart to show the highest recorded compensation at all of these companies from the Glassdoor data we analyzed:
These are certainly not representative of the highest paid salespeople at these companies. Instead, these show how much of an outlier the top earners are.
It’s hard for Glassdoor to get completely accurate information on something which tends to be quite secretive: the performance of a company’s top salespeople. So, we have to understand that these ranges and highest salaries are not exact but are estimates.
What we can say is that certain companies probably don’t provide an opportunity to make higher amounts of compensation. Consider that Lever has a low base salary overall (the highest base salary is $90,000) and the highest total compensation recorded is $180,000.
We looked online and couldn’t find any stories of salespeople at Lever making crazy amounts of money. Since these things tend to leak out online (stories about people making lots of money tend to get shared a lot), it’s probable that few, if any, salespeople make $500,000 or more at Lever.
Glassdoor Rating Has Almost No Correlation with Total Compensation
Since many people choose their jobs on more than just compensation, we decided to plot average total compensation against a company’s Glassdoor rating to see if a company’s reputation has any relation to compensation.
You can see a chart of the same data here:
This shows that there is pretty much no correlation between total compensation and how much a salesperson might enjoy their job.
We had assumed that companies with lower ratings would be forced to pay more to compensate for the poor experience, but for the most part, this was not the case. The only exceptions seem to be Apptus and Tibco, both of which provide an average total compensation of over $150,000 and have a Glassdoor rating of 3.5 and 3.4, respectively.
Free Lunches, Gym Memberships, and Other Benefits for Salespeople
We decided to look at some of the additional benefits that these companies advertised for salespeople. These are benefits that a company has verified to Glassdoor that they offer to their employees. Of course, there are individual exceptions inside any particular company.
You can easily look at the overall totals in this chart:
The first thing that jumped out to us was that Sumo Logic did not offer job training as an official policy to its employees. You would think that investing in your salespeople would only help them become more effective at their jobs.
Most of the companies provided free lunch and some type of gym membership. This makes sense as these benefits have become common perks in tech companies.
A few of the companies allow employees to work from home, a benefit that still varies widely across different companies.
Takeaways for Salespeople and Sales Managers
Here are our biggest takeaways:
- On average, private companies pay more than public ones, but this is not universal.
- If you are a true top salesperson, then consider going to a company that will allow you to maximize your earnings and potential. Not all companies have compensation plans that allow you this opportunity.
- Most companies offer a combination of additional benefits such as training, gym memberships, free lunches, or the ability to work from home.
- Think twice before going to a company just for the money. It’s possible to find a company with a great reputation as an employer, a focus on empowering and supporting salespeople, and a compensation plan you’ll be happy with.
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