Understanding Exec's Sales Compensation Simulator

Introduction

The Sales Compensation Simulator is a tool designed to help sales leaders model their compensation strategy effectively. This simulator allows you to visualize how different compensation structures affect both sales performance and company financials across various scenarios.

Video Walkthrough

Key Terms and Parameters

The simulator is built around several essential compensation components:

• Base Salary

  : The fixed amount paid to a salesperson regardless of performance

• Target Commissions

  : The commission amount a salesperson is expected to earn at 100% quota attainment

• Commission Rate

  : The percentage of revenue that converts to commission (e.g., 10%)

• OTE (On-Target Earnings)

  : The total compensation (base salary + target commissions) a salesperson can expect when hitting 100% of quota

• Annual Quota

  : The revenue target a salesperson is expected to achieve in a year

New Hire Onboarding Settings

For new salespeople, the simulator includes important ramp-up settings:

• Quota Ramp

  : Allows you to set lower quota requirements during initial quarters while maintaining OTE, helping new hires achieve target earnings during their onboarding period

• Guaranteed Commission

  : Specifies a minimum percentage of OTE that will be paid regardless of performance, providing financial stability for new hires

Performance Accelerators

The simulator supports commission accelerators that reward overperformance:

• Accelerator Tiers

  : Set up to five different accelerator tiers with customized multipliers

• Multiplier Effects

  : Apply different commission multipliers at various quota attainment levels (e.g., 1.2x multiplier at 100% quota, 1.5x multiplier at 150% quota)

• Qualification Rules

  : Accelerators only become available after reaching the full annual OTE target, not just the ramp-adjusted target

Performance Simulation

The performance simulation section allows you to model various performance scenarios:

• Monthly Quota Attainment

  : Set expected quota attainment for each month of a salesperson's first year

• Pre-built Scenarios

  : Choose from realistic ramp, slow start, big deal cycle, or top performer templates

• Custom Scenarios

  : Manually adjust monthly performance expectations to model specific situations

Results Analysis

The simulator provides detailed analysis in two key sections:

Monthly Earnings Table

This comprehensive table displays:

• Monthly quota targets

• Projected revenue based on performance simulation

• Base salary payments

• Commission earnings at standard rate

• Guaranteed payments (if applicable)

• Accelerator earnings with detailed breakdowns

• Progress toward both ramped OTE and full annual OTE targets

Investment Return Analysis

This section helps determine when a salesperson becomes financially accretive:

• Tracks the break-even point where revenue generated exceeds compensation paid

• Visualizes how different performance scenarios affect time-to-value for new hires

• Provides clear ROI metrics for compensation planning decisions

Sharing Your Models

When you find a configuration that works for your organization, you can share it with colleagues using the share button. This will provide them with the calculator in the exact state that you configured it.

Additional Resources

If you're interested in helping your sales team ramp faster and improve performance, consider exploring Roleplays by Exec. This AI-powered platform allows your salespeople to practice real sales conversations with customized scenarios for your organization, providing instant, actionable feedback to accelerate their path to full productivity.

For more information or to book a demo, visit exec.com.