The comp plan audit most companies fail
Siva Rajamani, CEO of sales performance management platform Everstage, has a test for broken comp plans: if you cannot explain it in 60 seconds, it is broken. If it needs an FAQ, it is a tax code, not a compensation structure.
He has reviewed 300+ enterprise comp plans since founding Everstage in 2020. The company processes $6B+ in commissions annually and raised $45M across Series A and B rounds (Elevation Capital, Eight Roads Ventures). His observation: 90% of companies make the same mistakes.
The complexity trap
Companies start with clean plans, then patch in exceptions until nothing optimizes. Example: a three-parameter plan becomes ten parameters across segments, product lines, and deal types. Reps cannot calculate what they will earn, so they default to whatever is easiest to close.
Worse, the hidden math often punishes intended behavior. Rajamani's example: a company adds an accelerator for multi-year deals but requires discounts that outweigh the commission bump. Reps rationally avoid multi-year contracts. The spreadsheet shows intent. Rep behavior shows reality.
What works: benchmarks and visibility
Everstage runs its own comp on three levers: overall quota attainment, a multi-year deal accelerator, and one-time revenue. Standard enterprise structure: 50/50 base-to-variable split, 4:1 to 5:1 quota-to-OTE ratio.
The critical piece: reps need to see earnings before they act. "What do I make if I close this?" drives behavior, not what you say in the all-hands.
Rajamani's broader thesis: sales comp is not back-office admin. It is the biggest lever in go-to-market execution. If reps are not doing what you want, audit the plan before you question the rep.
The AI earnings gap
Top performers are heading toward $1M+ annual earnings as AI widens the productivity gap. Rajamani's math: paying big commissions to a few A-players beats hiring mid-level reps, because you carry fewer base salaries for the same revenue.
His comp design philosophy: optimize for top earners. It is better on margins, and it is what keeps your best people from walking.
Worth noting
Everstage competes in sales performance management alongside platforms like Xactly, CaptivateIQ, and Oracle Incentive Compensation. The company has roughly 350 employees (estimated) and about $75M annual revenue (unconfirmed).
Rajamani's background: revenue ops at Freshworks, where he scaled the function from one person to 25. He left to build Everstage on the thesis that incentives drive revenue more than tools do.
Full episode covers quota relief mechanics, when reps should earn commission in the deal cycle, CPQ integration with margin-based comp, and six-month versus twelve-month comp cycles.