I am assuming by comp plans you are implying a variable comp only. For the variable comp, here is what I do:

1. 1/3 tied to PS Margin: this is not capped but, for all practical purposes, is capped because of revenue and margin numbers. Assume a payout of $y

2. 1/3 tied to new licenses: this includes both one-time and subscription and is also uncapped and tied to a specific attainment. For instance, if you are anticipating $’x’ million in total revenue from this and want to provide for an attainment of $’y’ as a max, then, you would express this component as a % of $x that would yield $y

3. 1/3 tied to customer satisfaction: this is capped at $y and you get to tie this to cust. sat surveys etc as you deem fit. I believe this is important as an effective manager MUST mange cust sat as well as margin - - or else, you will get new sales and margin but not satisfaction.

Hope this helps.

Rather than have a specific plan, we aligned ours with the product organization.

So, half of the PS team’s bonus is defined by the product team’s bonus (same structures, accelerators, etc.). This results in the PS team
and the product team having shared interests. The other half is a fairly typical revenue/margin split of the PS business.

The percentages for the variable component of PS Manager comp will change over time with the maturity of the organization and with
variations in strategic focus, but typically have components of:

1. Services Bookings - what is sold that quarter
2. Education Bookings - ditto
3. Billings - what is delivered that quarter
4. License Bookings - to tie interests of Services and Sales
5. Margin

We currently have our Practice Managers compensated as follows:

50% on Services Bookings
15% on Education Bookings
20% on Billings
15% on License Bookings attainment for the reps they cover

This incents them heavily to sell, but also rewards them for getting projects started and moving forward (the Billings component) and for
working closely with their assigned reps to help the reps be successful. Finally, we only allow accelerators on upside if margin
targets are achieved, so this keeps everyone’s eyes on making sure the business is healthy. We tweak these percentages about every other
quarter to make sure behavior is aligned with Services and Corporate strategy.

In terms of your desired emphasis on the sales of higher margin items, I’ve found onetime incentives to be very successful - for example, pay
them a set amount or a percentage of sale for each transaction.

Not really - we think of this more like profit-sharing. If the team does well, then we all do well. We in PS cannot succeed at the
expense of the product folks. When there is a that “big deal” on the line, but the clincher requires that the PS guys give up a huge hunk
of margin, this serves to keep us from being too territorial about it.

Kip,
At this point in our growth, most software deals require at least a week of consulting and/or training (same department right now).  So the manager has some control over the product license goal via responsiveness, triaging opportunities and being creative in deal structuring.

Regards,

Bruce I.

I would think that would depend on what value the equity is intended to provide. Are there dividends?, is there an expected liquidity event?,
etc.

Luther M.

What are people seeing for the equity portion required to attract top flight folks? I’m seeing studies that are anywhere between .6 and 2.5%, but
nothing terribly useful in terms of narrowing that down.

Richard W.