Effective Sales Compensation Plans
• The CFO questions the relative cost of the sales compensation program in comparison to financial results. Incentive Plan Design Process A typical sales compensation plan design process is shown in Figure 1. In determining the appropriate sales incentive measures, it is critical to first understand the entire process Step 1.
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downloads.erieri.comCompensation Mix Compensation Mix (also known as “Pay Mix”) represents the relationship of base pay and short-term incentives to total cash compensation. This term is commonly used in sales and executive compensation plan design. 100% = (Base Salary / Total Target Compensation) + (Short-Term Incentive / Total Target Compensation) Example:
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