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A comp plan can pay out like a record quarter even when bookings land at 61%.
AJ Bruno, co-founder and CEO of QuotaPath, joins hosts Adam Jay and Dale Zwizinski to work out who is accountable when it does.
They get into why AJ wants the CEO to sign off on comp, how short CRO tenure changes the picture, and where AI fits when it helps write the plan. AJ also scores Adam's Monday Morning Move.
We discuss:
- Why a rep at 70% of target can still be paid 85% of OTE
- Why AJ wants comp signed off at the CEO level
- What the CAC layer cake says about the real cost of a deal
- Why QuotaPath's admin NPS sits near 60 while rep NPS sits near zero
- Where AJ, Adam, and Dale land on clawbacks and mid-quarter plan changes
(00:00) The CRO who lasted two and a half months
(00:30) A made-up company that paid out on a miss
(02:45) How a rep at 70% of target takes home 85% of OTE
(04:15) The CAC layer cake and the real cost of a deal
(05:00) Why the CEO blames the CRO, and the three envelope story
(09:50) Who is accountable when AI builds the comp plan
(15:40) Admin NPS 60, rep NPS zero
(18:25) Nineteen month CRO tenure and boards that don't tell the truth
(24:25) Clawbacks, windfall clauses, and retention-based pay
(30:25) Monday Morning Move: AJ scores Adam's comp plan test
(36:20) Why changing a comp plan mid-quarter breaks trust
(37:55) Uncensored Questions: pay compression, Atlas bias, and dream vacations
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Creators and Guests
What is GTM Uncensored™?
Most GTM content covers the same ground. GTM Uncensored finds the operators actually in the seat and digs into what's true in today's GTM, not what sounds good.
Every guest is currently building a company, leading a revenue team, or running a GTM function inside a real business. During the show, Adam and Dale push the envelope until the real story comes out.
The show goes where most content won't: The motions that determine whether a company stays in business, or goes under.
GTM Uncensored is built for B2B revenue leaders at $5M–$100M ARR who are accountable to a number and need a real-world playbook, not philosophy.
Every episode ends with a Monday Morning Move. One specific action you can take this week, and a series of Uncensored Questions where listeners get unfiltered answers from people who've actually been there.
What we cover: Pipeline & GTM motion, post-sale architecture, CS & retention, NRR/GRR mechanics, RevOps, AI in the revenue org, executive branding, and more.
Your hosts: Adam Jay and Dale Zwizinski are co-founders of Revenue Reimagined. They didn't build a consulting firm. They flipped the fractional CRO model because strategy without execution doesn't move the needle. The questions they ask on air are the same ones they're solving inside real companies right now.
GTM Uncensored is the GTM conversations nobody else is having.
AJ BRUNO:
I have a, a really good friend that went to a high-flying company in New York. He had advised this company for a year, and he became the CRO. Great comp package. I helped him negotiate it. He's done two exits, and, like, one was a, just like a knockout home run exit for him and for everyone involved. And so he went there.
He lasted two and a half months. Just crazy to me. What? After a year of advising? Yeah. Wow. I'm never going full-time again. I'll put up with Dale
ADAM JAY:
AJ, I'm gonna drop you in a scenario.
That's where we're gonna start, today. And we're gonna kinda see what your take is. So triple A, Angry Alpacas Analytics. They are a company that has forty-two reps. They're eighteen million dollars in ARR. And the board deck said that ninety-three percent of quota was in motion heading into the back half of Q3.
Actual bookings landed at sixty-one percent. No one in the room could explain why the comp plan still paid out like it was a record quarter. Finance is understandably furious. Sales is happy they're getting paid. RevOps built the plan in some spreadsheet that only one person understands, and that person happened to have left last June.
You've built an entire company QuotaPath on the bet that this exact scene plays out somewhere at least once a quarter, maybe more. Um, so let's start with the uncomfortable one. When a comp plan pays out clean, but the business result was sh*t, whose failure is that? When the plan pays out clean on the quarter that missed by those thirty-two points, is that a sh*t plan, a sh*t forecast, or a company that just doesn't wanna find out?
AJ BRUNO:
All of the above? I don't know. I... Okay. Well, I got a question for you, and I want to know for y- from you guys, from Adam and Dale, what the hell does pipeline in motion mean? What does that mean? Tell me, please
ADAM JAY:
Yeah. So in, in this particular example, these were all commit deals. Ninety-three percent of these deals were
AJ BRUNO:
Committed deals?
ADAM JAY:
committed deals.
AJ BRUNO:
Well, there, there's
ADAM JAY:
They're gonna hit
AJ BRUNO:
there's a problem there. Um, but let's actually go to the,
ADAM JAY:
Yeah. Don't, don't, don't you love pipeline best case and commit? Those are my f- three favorite terms. I'm kidding
AJ BRUNO:
it's a, a different conversation. Um, okay. So let's actually talk about this because it's, here's 61%, that's interesting, but like think about an OTE. If, let's just make it easy, a 50, 50K, 50K.
Okay? If a rep, if just like a, a rep hits 70% of their target in a year, what's the percentage of it just, if it just played at 1X, what's their percentage of OTE paid out? Either of you know?
ADAM JAY:
If a rep hits 50 per-- 70% of their 50K
AJ BRUNO:
Yeah, 70% of their 50K. 30, so 35,
ADAM JAY:
Uh, thirty, 35K.
AJ BRUNO:
plus
ADAM JAY:
They hit 35
AJ BRUNO:
50K base
ADAM JAY:
so they're at 85
AJ BRUNO:
so 85%. So you paid 85% of their OTE because, for 70% of a plan. So inherently all plans are, are kind of broken in that way and, and that's something to, to think about that, uh, just, just more if you're like sitting there and you're like, "Oh, wait a second."
comp plan is clearly, definitely at fault. I'm like, what the hell were they paying on? Like cold calls at this point? Like what were you pay- what were you paying on if you're not paying on the 61%? 'Cause there's, even at 61%, if you have a record quarter in commissions being paid then there's some incentive that is just totally misaligned to the business objectives.
So like, uh, I'm gonna, I'm gonna actually go all the way up to the CEO and the board on this one. There, it starts at the top, uh, there, 'cause they approved the plan, I would assume. $18 million company. Eh. How many reps? 42? 42. Uh,
ADAM JAY:
Yep, forty- forty-two reps, eighteen million. We- we'd hope we're getting some CEO approval on this one
AJ BRUNO:
Yeah, and I, and I, I'm sure you two both know this, but your G- G- your GTM mo- motion is, like, screwed up somewhere. You're like... We always, I always, at TrendKite used to talk about this thing called a CAC layer cake, which is just like, okay, how much are you paying your BDR? How much are you paying your AE?
How much are you paying the CS, the AM? And if your cost of, like, that, the sale, cost of sale or the, just the cost of the deal is above 30%, that's problematic. 'cause most people are like, "Oh, well, I pay 10% to 15% for my AE." But that's not the total cost. You gotta add all of those up. So, you're challenged in a whole bunch of areas here.
but I do think a lot of this starts with the comp plan and starts with the approval process there. You're just clearly incentivizing the wrong behaviors. You're clearly not incentivizing for commit ops closing in 91% or 93% committed ops, and you land at 61%. Well, this is what will happen. This is what you guys both know.
The CEO will say, "This is the CRO's fault." And you twist that screw, and then, and then you let go of the CRO, but they last nine months. But you only get one... I, you know, it's not PC to say this, but you only get one bullet in the chamber and... Or you get two. You get two, but, that second one is, not going somewhere where it's, on you.
The board's not, board's gonna get rid of you as a CEO. So, disappointing to hear. But those quarters happen. Like, it happens. And is it a trend or is it explainable? In this case, those numbers are a really tough pill to swallow, and there'll be certainly some changes in the organization.
ADAM JAY:
So there definitely be changes. The comp plan needs to be looked at in its entirety. I'm a big believer that most people build their comp plans wrong. And we'll talk about QuotaPath and Atlas and all the experience you have. You've, you've probably seen more comp plans than any CEO because of the access to the data you have.
so I think you could speak to what works well, what doesn't, and I certainly at some point want to hear about the most f**ked up comp plan you've seen. But I agree with everything you said on that scenario.
AJ BRUNO:
it's a hard world out there. Do you guys know the three envelope story? It's one of my favorite stories. It's the best
ADAM JAY:
I do not. Tell us. Let's go
AJ BRUNO:
There's an investor named Josh Kopelman that told me this story once, like 10 years ago, and I've, like, I've taken it and I will say it's my own. It's not my own, but Josh would say it's not his own either.
Uh, it's a great parable. So, uh, a CEO walks into his brand new office and the outgoing CEO is there, and the outgoing CEO is, uh, like shuffling papers around, and the n- incoming CEO is like, "Oh, Adam, I'm so excited to talk to you. Please, please, please tell me everything there is about this business." And Adam looks at AJ and says, "Dude, you're on your f*cking own.
Good luck. You've, you'll, you'll g- you'll figure this out. You... But, but I actually got something for you. Here are three envelopes. They're labeled one, two, and three. Do not open them unless you are in absolute dire need to f- to fix something, okay? Like, you will... You... Trust me." And he just walks out. AJ's like, "WTF just happened?
Okay." He tosses the envelopes to the side and he's like, "I gotta get-- Oh, I gotta get to work." I mean, he's figuring things out. He's, like, trying to get everything squared away. First quarter goes okay, but, like, not, like, not great. The company's in trouble. This, this is a kind of a mess. It's a turnaround situation.
So the second quarter comes around and things are not going to plan. It's getting even worse, than the first quarter. And he's like, "What do I do? He's... Board meeting's tomorrow. Envelope." So he digs out in his desk, opens, opens a drawer, pulls it out, takes open, rips open the first number one, and it says, "Blame your predecessor."
"Got it." Walks into the board meeting. "Adam, that jackass, he didn't know, he didn't know anything. He didn't... He just... He was just an idiot." He's like, "Yeah, the board's loving it. They're eating it up." He's like, "Yeah, that's why we fired that guy. We got him out of there right away." And, uh, he's like, "Okay, cool.
Whoa. All right, so I got, I got this." The board's like, "We got your plan. Just keep following your plan." Okay. Next quarter comes along and it's still not going well. This time he doesn't hesitate. He just roops-- rips open the second, uh, the second envelope, looks at it. It says, "Reorg." He's like, "Oh, that's brilliant.
I'm gonna move, uh, CS under marketing. Um, okay, well, our BDRs were marketing, now they're going under sales. Uh, we got a, uh, the PDE team, we got a, our chief product officer, he's now in charge of the engineering team." He walks in with a plan, hierarchy, and board's like, "Okay, all right. We can buy this. This makes sense.
This definitely makes sense." They say, "Yeah. Why, why would you put BDRs under marketing? That doesn't make any sense. Definitely put it under sales." So, he goes about his, his very own quarter. The reorg's a disaster, by the way. Total disaster, like a, a mess 'cause, you know, reorgs always go perfectly well.
so the next quarter it's not as r- but he's holding off. He's like, "I can't open this third envelope." I can't, I can't do it. Finally, he bites the bullet, opens it up, looks at the piece of paper, and it says, "Prepare three envelopes." Get it?
DALE ZWIZINSKI:
Yeah,
AJ BRUNO:
there you go. There you go. I know, it's a thinker.
ADAM JAY:
like it
DALE ZWIZINSKI:
I love it. I love it. And it's so true. Like, you know,
I was talk-
ADAM JAY:
have an envelope for you
DALE ZWIZINSKI:
Yeah. Good. I've been looking
AJ BRUNO:
in door number one?
DALE ZWIZINSKI:
I've been looking for the envelope
ADAM JAY:
Blame, bl-bl-blame, blame your co-founder. That's envelope
AJ BRUNO:
Blame your co-founder. I've used that one a couple times. It, it doesn't work actually. You can't blame co-founders, turns out.
ADAM JAY:
Mm.
DALE ZWIZINSKI:
A.J., um, let's, let's dive into something that I think we hear all the time is people want comp plans off their plate. Like, we hear this all the time. And because they don't really know what to do, they're not really sure, like, how it's gonna work out. They, they don't know what good or bad looks like.
Um, so you guys have, have de- developed and delivered Atlas, uh, this summer, which is amazing. But the comp plan is like one place that can get really sticky if it's not done well or it gets, it gets it wrong or people, like you have to iterate over it. So now that you have Atlas and you have AI building this thing out, like who is accountable if the comp plan is wrong?
Like before you could like go grab your like controller and be like, "You, you know, you guys did the wrong thing." But now you have AI and like blaming AI doesn't always end well. So like who takes responsibility for these comp plans now?
AJ BRUNO:
it's an interesting question because it's like, well, and that, and I think that you're asking the same thing for anything. Like, if you're just... We're all just happy to click buttons. Like, clar- critical thinking has really gone out the door in so much of this, and it sucks. It really sucks. Uh, before I get to the question around who's accountable of the comp plan, I'll give you an example. Phishing attacks have gone up, like, an insane amount. I don't know what the data is, but I know for our team and for the number of emails that I get that are asking for things, and I'm not just talking about the texts that go out to my team that says, "Hey, this is AJ. Would you kindly please send me 10 Apple gift cards?"
No, there's so f- there's very sophisticated phishing attacks that are going out the door these days, and our team, we have our own, you know, cybersecurity team, and our, uh, CTO sent out, like, a, oh, a, did a test, a phishing test, to actually catch our own employees. So we're 70 employees. What percentage of our employees do you think fell for a, the phishing attack that went out the door? Oh, geez. If it's 50, I'm gonna have to fire half the company. Thankfully, it wasn't 50, Adam, but that would be, that would be problematic. Let me give you the, the, like, what the context of the baseline. The baseline last year, two years ago, was 2 to 3%. We are up to 15%. So there were, yeah, 15%. Uh, and I get it.
They're really sophisticated looking. And so the challenge that we've come across is that we just mindlessly click on things, copy and paste, use Granola, use Wi-Whisper Flow, use whatever, and just dump it in, and then garbage in, garbage out. And it's so frustrating, uh, to see, to see that. So the account-- What I'm really saying is, like, accountability is, like, taking a back seat, it feels like, in this world.
And we don't have enough proof points or cycles on some of these things. So comp plan or go-to-market sales methodology, the strategy behind it, uh, what you guys are doing and how you're employing that with your clients, um, there, there's gonna need to be some cycles. But what I'm finding is that the companies and the organizations that are actually taking the time to still do some things manually are the ones that are gonna win.
And as it relates to comp plan, the AI, just like benchmarking data or anything, is just another, it's a data point to be used in a way. It's like I d- we-- even when we talk to our clients on the services side, customers on the product SaaS side, our clients about this, we're working through it like we're solving a problem, and we're having a chat conversation, to really understand, okay, well, would this work or would this work?
And I mean, they don't have to take any of it if they don't want to. It j- we just make it easy to automate it and push it and say, like, "Okay, this is actually the plan forward now that we've done all the scenario modeling, and that we've looked at this and w-we've done the Monte Carlo sim-simulations, the capacity planning, the whatever.
We're now gonna push this into our QuotaPath instance." So at the end of the day, the accountability still falls with the accountability that was previously. In our case, I'm, I'm trying to elevate comp to the CEO level of the sign-off to, so that the data, Because the data's right there. So that's the person that ultimately should be accountable.
That's why in your example, like you said, who's ultimately accountable? The CEO's accountable. The CEO used their, their two envelopes. They're on that third prepare three envelopes that they're gonna hand to the incoming CEO. AJ's done. And so that's why I, that's why I think that, you have this CFO, RevOps leader, CRO, like, Venn diagram, and it's, you, you all deal with this.
And that Venn diagram's a really important one, but it's a very difficult one to crack because of the translation layer and the operational cadence in, that exists in every organization. Everyone's a snowflake. And so you have to, you have to, like, really figure out what that looks like.
DALE ZWIZINSKI:
the answer is yes. Like, at the end of the day, the human always has to be responsible for, like, the output of what's happening. And what I am envisioning as this progresses is back to that third envelope opening up. Like, there's gonna be a, a blaming from the CRO, the RevOps, the CFO.
Like, I don't know, Atlas told me that I should be doing XYZ. And it's like, okay, but you still need to think through that. And I do, Everyone wants a throat to choke
Yeah, your, your analysis of, like, the thought people are using AI more as the thought leader versus the thought partner, and that, that is a big problem because if you're not interacting it, with it like a partner and you're just taking the data, like game over
AJ BRUNO:
I would fully, fully, fully agree with that. I would also say that we see this in our own tool today where, um, our admin NPS is, hovers around 60. It's actually quite good. I mean, it wasn't always like that. We had plenty of product challenges. This year it's been really strong. Our rep NPS hovers around zero. And it's not because of the tool, it's because of the plan. They're frustrated with their plan. And so it's a really interesting thing to see. But people want, want something to blame, so they're like, "Well, it must be, QuotaPath's problem." Um, but no, you didn't take our advice.
ADAM JAY:
Yeah, I mean, there, there's definitely that. And when you're looking at comp plans, you're looking at advice. I often talk about OTE versus faux TE, right? You know, I could-- anyone could say that, "Oh, you know, your, your, your OTE is five hundred thousand dollars." Great. Two fifty, two fifty, your comp plan's unattainable.
Your OTE is two hundred and fifty thousand dollars, um, no matter how you slice it and dice it. Um, Da-Dale promised me when we started this company, we'd make a certain amount of money. Um, I'm still waiting. Um, faux TE, man. Fau-faux TE.
AJ BRUNO:
I, uh, remember when we were first hiring, uh, this is 2013, 2014, I was trying to get the best of the best. People that weren't looking, and I was hiring friends of people that had worked there where, and, uh, a guy, Justin Papermaster w- became my VP of sales, um, and Max Bergen, who now works with me at QuotaPath again, third company, by the way, um, as our VP of Strategic Services.
And I, uh, 90, $90,000, $91,000 I think was our OTE, and I was going up against all these Austin, like, s- sexy companies that were offering enterprise at 250, 300K OTE, and I was like, "You're not gonna actually make that. I will, I will promise you, if you, if you do the things you need to do, you'll do 150% of the 91K, like, and, uh, no problem."
and we got a lot of people that joined, and we had some people that didn't and went to the, the flashy thing, and the flashy thing, you know, died out in six to 12 months. Um, Adam, you and I met at a flashy thing. You find you know? Uh, so I know, uh, we know how that works, where you get, you get the glitz and glamour of you have these investors, Sequoia, Andreessen, Iconic, and, like, not that I wasn't just naming all of the investors in one of my competitors.
But, um, you, you get that and then, you know, what does that amount to? It's not, it's not... So I always talk about the sales to earnings ratio. It's not the quota to OTE ratio, four to one, five to one, whatever. But it's like, okay, how much do they actually sell, legitimately sell, versus how much they earned?
What does that ratio look like?
ADAM JAY:
Well, and that goes all the way to the top. So let's, let's talk about CRO tenure right now, right? So CRO tenure is brutal. Nineteen months, is the median, um, right now, give or take. Um, a CRO leave-- who leaves before fifteen tends to be net negative once you add in the replacement cost, the hiring, the downtime, the sales performance, everything that happens when someone leaves.
Yet, at the same time, companies are still writing five to 10x OTE return expectations on these comp packages as if the person's guaranteed to stick around long enough to deliver it. But they're gone fifteen months later. And Dale and I talk about this a lot, right? You hire a CRO, they have a million priorities they need to go handle.
Go build all this, fix all this, solve all these problems, build the foundation, but at the same time, you gotta go hit these numbers. So is it the comp structure that's broken? Is it the expectation that someone can truly turn around a revenue org in twelve to fifteen months that's broken? Like, where's the issue here?
AJ BRUNO:
Well, AI's gonna fix all of this, so we should be fine. We're just, we're good. I, I have a, a really good friend that went to a high-flying company in New York. He had advised this company for a year, and he became the CRO. Great comp package. I helped him negotiate it. And he, he's done, uh, two exits and, like, one was a, just like a knockout home run exit for him, uh, and for, for everyone involved.
And so he went there, uh, he lasted two and a half months, which is
ADAM JAY:
What? After a year of advising
AJ BRUNO:
After a year of advising
Yeah.
ADAM JAY:
Wow. I'm never going full-time again. I- I- I'll, I'll
AJ BRUNO:
Yeah. I mean, there's, there's, there's definitely the horror stories. I, and actually you hear about, like, the OpenAI or just any- anything, like, where you have all of these AI frontier models, infrastructure harness companies that are hiring CROs right now and it's like sales are back.
And, uh, a lot of the RevOps folks that we know are helping these companies build the infrastructure to build these teams. And what I've realized is that there's, they don't know, they're, they, they don't know anything about anything. They're going back to the MongoDB, Oracle, uh, way, ways of selling, and we are seeing that, um, come full circle once again.
But these entrepreneurs and founders are totally lost in space when it comes to go-to-market, and they don't care. They literally couldn't give a sh*t less. Uh, and I've, I've met a handful of CROs that have worked at companies like GitHub. GitHub's a great example, um, where, Paul St. John, I think that was the CRO.
They were at 20 million when he joined the company, and the c- he said the CEO wasn't even gonna meet with him joining as the CRO. And he was like, "No, I'm not gonna go be the CRO of the company and not meet with the CEO of GitHub." Uh, which he eventually did, and it turned out it, I mean, they turned into a rocket ship.
He, crushed it there. So it works out sometimes. Figma, another company, uh, where early CROs. Um, but it's just the CRO gig is just, it's a hard, hard gig. There's so many variables you don't know. Like, you don't know what the expectations are of each individual board member, and they won't tell you the truth.
And the CEO tends to, especially if they're in one of these companies, they're gonna be a first time founder most likely, they're just gonna be like, "Okay, well, I don't know anything about this, but m- my board is saying that we're not doing the things that we need to do, and I need to make a change. I don't..."
Like, this CRO is here for three months.
ADAM JAY:
What you just, What you
AJ BRUNO:
750K,
ADAM JAY:
think is the most important thing, and I've seen it, you've seen it. I, I'm sure Dale's seen it if he's ever interviewed for a CRO position. Um, the board doesn't tell you the truth. I can tell you, having dealt with enough boards, eight out of ten times, there is such dishonesty coming from the board as to what the expectations are, what they want, who wants what, who gets along with who, what it takes to get something.
Like, the-- we, we were just talking about this yesterday, um, w-with a client. Like, the level of dishonesty on the board and the PE and VC side blows my mind. And I think that if we-- and we're not gonna solve that, but that would fix half of these problems. Just start telling the damn truth
AJ BRUNO:
Well, they can't. Uh, that would... It's a, they, they're like the facade has to always be up. Um, ask any fund how their 2021 returns and vintage funds from 2021 are doing, and you'll hear, "Great, everyone's crushing it."
But no one... You can't... But like the mu- like, oh, Miro and Airtable, that won't happen to me.
Meanwhile, Bending Spoons is just collecting all these corpses, it feels like. I don't understand. And I, I just look at it and I'm like... And even for QuotaPath, I'm like, we just, just continue to create customer value, create customer value, create customer value, and, like, I can't do anything else. If I don't, that's it.
That's all I can be. I, that's all I literally can do. I can't help it what the market's trading the multiples at 1X or less than 1X for some of these companies. It just is what it is. Um, so yeah. I mean, I, I, uh, think we're, we're in a challenging, challenging spot for not just CROs, but for SaaS companies, uh, more broadly.
And you know, I talked to my, uh, co-host of, of my own podcast, and, like, the, the general consensus is, well, like a lot of these companies, their employees are getting secondary. I'm like, are they? I mean, like, are they at that level? Like, what percentage of overall employees that have equity at some of these companies are, like, seeing secondaries?
I don't, I don't know the answer to that, but we shall find out.
DALE ZWIZINSKI:
Yeah. And it's, I, I think it's very tricky, overall to, like, develop comp plans. And I want to double-click on something that I've been thinking about for a long time. And, and we don't like to put clawbacks in comp plans because I think it disincentivizes things and, like, goes through process. But there's been a couple of cases now in California that have been litigating for, like, decades, right?
That basically once a commission is earned and paid, a company can't legally take it back. But that earned, uh, is the word in every clawback clause that we're trying to refine in our favor. So where's the fine line between the windfi- the windfall clause that's protecting the business and one that's just writing a, a legal escape hatch?
AJ BRUNO:
Well, windfall and claw- clawbacks, very, very different.I will say I am in favor, ugh, this is a strong word, favor of a clawback under certain situations, and I'll explain that in a second. Windfall, I like, I've never seen that really work out in a, in a great way. Like it's just, that feels, it just feels punitive.
I've seen it go south more times, especially with companies that, where the sales team is, is scaled and, uh, that's just gonna get out. Like you're, you're owing a million dollars to a rep for closing a deal, plus like $100,000 to the solutions engineer who might not have even been involved or whatever.
And like, okay, the CFO comes in and is like, "Mm, we're gonna cap that at, uh, 10% of everything, uh, that you're each owed." And like that just, you know, that term exists in these, all these comp plans. It just is a very ugly term to deal with. Now, on the clawback, here's the thing. I mean, we have this idea and concept called payouts eligibility inside QuotaPath, which is where you pay when the invoice is received.
So you're connecting your ERP system, QuickBooks or whatever, and so you can, you can basically we're an E- QuotaPath's a RevOps ETL at that point, but allows you to be able to track these and then pay them out. Obviously, best in class companies are not doing that. Like that's, th- just is like, like no.
Pay on a quarterly basis, pay 30 days at the end of the quarter, whatever, and say it out. But I do think there is something to be said about this, the reps selling to ICP and, uh, selling good deals and, uh, you know, the Mark Roberge science of scaling sales acceleration formula will tell you that you really need to make sure there's a part of that incentive that is attached to the retention of the customer.
and I believe in that, uh, fully. And so you can probably get away with putting a retention component inside your comp plan in place of a clawback, kind of operates in the same way, and that solves that, right? So that would be, that would be my advice there. But I'm not fully opposed to clawbacks and maybe 'cause in my own company I'm like, "Are you kidding me?
We have to write off this contract for this reason? That feels like we should have known this situation."
ADAM JAY:
only time I'm a fan of clawbacks is if it's like rep dishonesty or s-something along those lines. Like if the rep told...
No. But if, if the rep tells the customer that AJ... Let me finish.
If the rep told the customer
If the rep to- I love it when we're not at home and there's a delay and I get to yell at Dale.
Um, if the rep told the customer that, you know, "AJ promises we're gonna build this sh*t for you," and we don't, and that's why the customer churns, like, hell yeah, take that money back. Other than that, I disagree with clawbacks
DALE ZWIZINSKI:
But AJ, so the, the scenario you just put through where it was a bad deal that was sold, like who's really responsible for it? It could be your sales leader, it could be-- like y- like I recommend you do deal desks on like all things.
AJ BRUNO:
leader. I mean, claw backs are you c- equal equal
DALE ZWIZINSKI:
it could go, like it, could it could, go all the way up to like your CFO.
Like let's say you do a deal desk and everyone agrees to it and, but it still becomes a bad deal. Like do you want to go claw it back? Like my recommendation on all deals that like either you have a feasibility study on a deal that you can do super quickly on like a, a red, yellow, green. If they're yellow, they need to be like brought up to the top and someone has to make a decision. So like, yes, if you leave a, if you leave the sales rep on an island and they sell a bad deal, like who's responsible for that? In my, in my thought process, like that's the company's responsibility that no one's managing that, that rep properly.
AJ BRUNO:
Yeah, I've, I've, I hear you on that, Dale. I would also say that there's every comp plan has exception handling. That's what kind of the windfall clause really is on the other side of it. And I think that there's a just, you just... I mean, we don't claw back on everything, of course we don't, that, that meets that, um, criteria of what you just said, where it's like, no, the solutions engineer was involved, we looked at the data, the plans fit, all of the things fit, but the point of contact left a month later and, like, this got orphaned and they're just saying they're not gonna pay it.
Like, what are you gonna do? Are you gonna take them to court? Are you gonna send it to collections? You can do those things, of course. And I do think this is a problem with the world and I'm... Tell me, correct me if I'm wrong on this. It felt like a 10 years ago people took bookings and signing contracts, contracted revenue more seriously to pay than it does today.
It feels like it's like, "Oh, I don't have to do that. I don't have to deal with that." I'm like, "Well, y- what do you think contracts mean anymore?" They just don't have the weight that they had 10 years ago, unfortunately.
DALE ZWIZINSKI:
Yep. And we, we have, we have clients that have contracts that are really like just licenses to hunt, which That's a whole separate conversation. I don't think anyone puts-- not anyone, very few people put faith in bookings anymore. Um, it's a, yeah, whole separate conversation. Um, AJ, I wanna share and switch to what we call the Monday Morning Move. Uh, so this is a practical takeaway, uh, that our listeners can test this week.
ADAM JAY:
You have two jobs. Job number one is you're gonna score my Monday Morning Move from one to ten. One being the worst, what Dale wants you to score me, ten being the best, what I want you to score me. Um, my average is pretty damn high. Number two, you're gonna tell me what you
AJ BRUNO:
Pretty damn high as in like a, like a seven because people
ADAM JAY:
Nah, like ab-ab-ab-ab-ab-above an eight.
Cl-cl-closer to, closer to a nine. Um, we actually-- Dale, we should put a tracker on the website of the, the Monday Morning Move rolling score. Um, just have Claude do that. Uh, then you're gonna tell me what you would add, change, or push back on, or tell me that it's total sh*t
AJ BRUNO:
Okay
ADAM JAY:
All right, here we go. Pull up your last comp plan and run this before you touch a single rate or accelerator. Pick your five most tenured reps and ask each one, without looking at the document, to tell you in one sentence how they get paid on a multi-year renewal versus a brand-new logo. Then write down those five answers, how those five answers disagree. Next, you're gonna take whichever deal type generated the most commission disputes last quarter, and you're gonna trace that from the close date to the payout date, noting every place a human made a judgment call instead of the system. Finally, you're gonna go ask your RevOps lead the blunt version of this question: If I got hit by a bus tomorrow, could someone else explain to a rep this comp plan in under two minutes?
If the answer is no, that tells you that the plan is running on one person's memory instead of the business's structure, and that, my friend, is an ownership conversation to have before you even touch the formula again
AJ BRUNO:
So these are three different things. Um, and so I have to score them and then probably do a weighted scoring
DALE ZWIZINSKI:
Ooh, I love This This is Okay, so AJ right here
AJ BRUNO:
is me writing this down. Look, let me start with one. I really like the concept. I'll give it that. That's the, the, the thing that I will say. The challenge with it is you picked, you picked a multi-year, and you were very specific on how multi-year versus single.
I think, like, I understand why you're asking that specificity, but where reps actually get confused is not in one component, it's actually in the mechanics of it. And like where does it, where, what field in Salesforce is this reading off of, for example? And so comp plans in general can be really simple on the surface, but the field mapping, the data hygiene, most importantly, is where they, the devil's in the details.
And so I'd like that question to be a little bit more specific around that. So I'm gonna give you a seven, uh, on that one. Okay?
The second one I really like. I was, uh, I'm a big fan. I love the, the train of thought and the journey of a deal and getting someone to actually talk through it and then also saying, "Well, here's, here's a failure point, here's a failure point, here's a failure point."
That has probably served you guys really well in meeting with your clients. Um, and I'm gonna give you an, I'm gonna give you a ten on that 'cause I f- like, because, I don't want this to fall to a four point two, so we're giving a ten on that one. Um, okay, the last one was RevOps getting hit.
Was it RevOps getting hit by a bus
ADAM JAY:
So the last part is that the revenue leader, um, says,
"If I got hit by a bus tomorrow," you're asking the RevOps lead, "If I as the CRO got hit by a bus tomorrow, is there someone else who could explain this plan to a rep in under two minutes?"
AJ BRUNO:
I'm gonna have to score you a seven on that one here because, like, I just can't get behind that being a realistic possibility. And I, I could, I could... If that is
ADAM JAY:
Listen, that's an, that's an, eight average. I'll, I'll-- Coming from you, I will take that. That is a high score
AJ BRUNO:
Yeah, but I didn't give you the weighting of each point of it. The first one...
The second, the second one where you
ADAM JAY:
they're weighted equally.
I'm kidding.
AJ BRUNO:
10%. You'll get, you'll get the eight. Eight, eight is... Eight... I'll give you an 8.5, Adam. I'm gonna give you an 8.5 on that one. How about that?
ADAM JAY:
It makes me very happy. Da- Dale not so happy
AJ BRUNO:
Yeah. Dale, Dale, I think you...
I was fair with his, with my critiques of his questions and... Wasn't I? I feel like I
DALE ZWIZINSKI:
I think you're fair. I just think the score is a little high, but that's
ADAM JAY:
The hit by a bus is wrong, but in
DALE ZWIZINSKI:
than the score
ADAM JAY:
if
AJ BRUNO:
Seven's a detractor though. This is NPS scoring. Seven's a detractor, so you, you keep that in mind
ADAM JAY:
If, I leave tomorrow, can someone explain this comp plan? And having-- being in the roles we're in where we-- listen, no one calls us to come into their business 'cause things are going great, right? Like, people call us 'cause there's a problem. So
CRO gets fired, we come in, and one of the first things we look at is the comp plan.
And there was a recent company where I looked at a comp plan and like, AJ, I sh*t you not, the thing was 11 pages, um, of like, I just-- how? What? How? What? Like,
I,
AJ BRUNO:
Okay, one of our customers had 150-page
PDF.
ADAM JAY:
who's reading that?
AJ BRUNO:
kidding. N- no one. Why do you think we're being, why do you think we're being hired? You guys are being hired for the same reason we are being hired for that.
ADAM JAY:
Like a hundred and fifty pages, I guarantee you no one knows how they get paid.
AJ BRUNO:
No.
No. And it's all... Well, the funny thing is, the 150 pages that no one knows how they get paid, it was all definitions and exceptions. And, and so it's like, well, that's the problem. It's like you're, you're trying to explain how they get play- paid, not in like the simplest terms. It's ridiculous.
ADAM JAY:
So I, I have a question for you before we go into our uncensored questions, 'cause when you talk about exceptions and definitions,
AJ BRUNO:
Oh, these were censored? All your questions were asked-- I thought they were all uncensored.
ADAM JAY:
Touché. Um, in a lot of comp plans, what I see is a line that says, you know, something to the effect of basically everything is up to management discretion. We could change the comp plan at any time that we want for any reason. What, what are, what are your thoughts on that? 'Cause a lot of companies do, like mid-cycle, "Oh, we're gonna change the comp plan."
Um, like, fair, unfair? Should that be allowed? Like, what, what are the rules as the comp expert?
AJ BRUNO:
CFOs love this one simple trick. Uh, I, I mean, that sounds like a contract you're signing that at the end of it says, "Oh, by the way, we, uh, reserve the right to change this at any time." Like, "Oh, we're gonna invest $40 million into your business, but at the end of this, uh, contract, we... No, we could change that."
It doesn't, like, who does that? So I would not be in favor of that at all. I don't think anyone should be in favor of that. Were you guys in favor of that?
ADAM JAY:
No, not, not at all. But like I've literally was sitting across from a CRO a couple days ago who's like, "Yeah, we, we, we need to, we, we need to change this before the quarter's over." I'm like, um, we can certainly talk about changing twenty twenty-seven, um, moving forward, but we're, we're not changing mid-quarter when the reps have been s-- Like, this is what you get paid on.
This comp plan incentivizes behavior. And now we don't like this, so we're gonna change it 'cause we might be paying you too much, or we think we need to change the goalpost? Yeah, I don't think so
AJ BRUNO:
Yeah, I Yeah, that should never happen. Cool. AJ, let's, uh, let's wrap this up a little bit with some rapid fire uncensored questions. So they're all uncensored, but we'll do a little more rapid fire. So, Xactly's whole twenty twenty-six pitch is built around pay compression being the top threat to sales teams this year.
DALE ZWIZINSKI:
Does this reflect something real, or is just, this just a compensation vendor manufacturing urgency to sell their software?
AJ BRUNO:
I don't think that's real. What we have seen is not pay compressi- I actually think it's, maybe it's the opposite. So you have a, like a barbell curve on earnings, which you've typically seen. With our benchmarking data, what we saw, have seen it is you have... Or sorry, a bell curve. I said barbell.
You have a bell curve in a typical earnings structure like anything. Uh, what we have seen is a barbell, which means the lower performers, maybe this is what pay compression means, I don't know. Maybe I'm not understanding it correctly. We've seen the lower earners be further from the median and the higher earners much higher than the median.
Uh, is that, is that pay compression or am I, what is pay compression in that instance? Is that, that's not, barbell's not pay compression. It's actually
DALE ZWIZINSKI:
No. Yeah. Yeah. It's, it's pushing it out. I, you know, when I, when I read through some of this report, they're basically saying that, you know, people don't want to be paying a lot for the sales reps and/or the commission themselves, so they're like compressing what the OTVs
AJ BRUNO:
here's my uncensored, here's my... Yeah. Pay your high performers well. Pay them super well. And pay, don't pay your low performers well, uh, at all.
DALE ZWIZINSKI:
or just build your comp plan in a way that you want them to act and,
AJ BRUNO:
Yeah. Incentivize their behaviors. Oh, shocking.
ADAM JAY:
Go fig- Go go, figure.
AJ BRUNO:
God, exactly. Get your sh*t together, man.
ADAM JAY:
AJ, I'm a, I'm a, I'm a huge Atlas fan. Um, I use it. I've promoted it. I think it's great. But it launched saying that it was trained on T... You guys launched Atlas saying that it's been trained on tens of thousands of comp plans. Whose bias is backed into that training set?
The plans that worked or just the plans you happen to see the most
AJ BRUNO:
Ooh. Ooh, that's a g- if you had asked me that question, I would've rated that question a 10, Adam, previously. That's a great question. That was actually a great question. Uh, so we, w- when we first launched Atlas, it was trained on those comp plan consoles that we had, which I would agree, fully agree that it has a bias.
Today, we've actually, because we have, uh, we've anonymized all of our data and our CTO, Eric, and our actually VP of partnerships, Graham, spent four months getting all of our, uh, customer data, like 50,000 reps' data in a usable, structured way, and that's what Atlas is actually trained on today. That is, uh, that's not biased.
Um, so I-- But it's both of those things together because you have to have, like, the, the mechanics of how do you build a comp plan with the actual data to build the best plan possible. Um, and that's how those things, uh, get tied together. Great question.
DALE ZWIZINSKI:
Awesome. Yeah, he-- we give him at least one good question every session, so that was his one good question. Um, Dale, can-- See, I, I, I remember my questions. Can you, can you please, can you please read your question for AJ?
AJ BRUNO:
I can't wait for Dale's question. It's gonna be a good one. Dale, what do you Oh yeah, this, this one, this one's amazing. This is such a good question. It's so unique. You've never heard it before
DALE ZWIZINSKI:
what's your dream vacation destination? Where you
AJ BRUNO:
Oh.
well, my wife and I went to Japan last year for two weeks, and I f**king loved it so much that I would say my, still my dream vacation would still be Japan because there's so much to see and do. Uh, and we didn't see it and all, and do it all, and I, I loved it. And it's like Japan seems to be the vacation du jour for a lot of folks, certainly
ADAM JAY:
we're plan- we're planning it now too.
AJ BRUNO:
There you go. It's awesome. It was a really, really great trip last year. Uh, I would go back. But you know, if maybe somewhere where I haven't been, I haven't been to Australia yet. I really need to get there. So I'll say Australia with The-- ' family cause this is a, that's family-friendly country, I feel like.
ADAM JAY:
The irony of Dale asking your favorite vacation destination is Dale travels to his boat and back to his house. Um, so I, I always laugh every week when
Dale
AJ BRUNO:
Listen, Dale's got a boat.
ADAM JAY:
He...
AJ BRUNO:
What do you have, Adam?
So I'm just kidding.
ADAM JAY:
I'm I'm I, I, I, I, I, I, have, I have a sports car
AJ BRUNO:
What kind of car do you have, Adam?
DALE ZWIZINSKI:
not for long.
ADAM JAY:
Uh, uh, I, I, I, I have a Porsche
AJ BRUNO:
Oh, look at that.
ADAM JAY:
But I, I, I, I l- I love the airplane. Like I, I, I w- I would love to come fly with you. Um, I-- One of m- one of my dreams, true, true story, is, is to actually fly in the cockpit. Um, I'm, I'm a little, li-little bit of an airplane geek
AJ BRUNO:
I... Well, there you go. I used to run a, uh, podca- podcast called Value Props where I flew business leaders in the cockpit of the airplane. Um, I did this right before COVID hit, so I had six, and then afterwards. Yeah, it was awesome. We did this thing where you do an elevator pitch, so I'd pitch the airplane back for 30 seconds a thous- to get 1,000 feet, uh, basically going 2,000 feet per minute straight up.
And if they didn't finish their pitch, I'd push on the yoke and go weightless for, like, five seconds.
ADAM JAY:
That's amazing. Listen, I'm, I'm down. I love it. AJ Bruno, thank you for joining the show. Y'all go check out QuotaPath. This is not a paid endorsement. This is not a sponsorship. Like I'm telling you, we use it. We love it. QuotaPath Atlas. I have tried the other platforms. I will not mention them by name. Um, they don't deserve the airtime.
Go check out QuotaPath, quotapath.com
AJ BRUNO:
Adam, I just bumped your score up to a nine. There you
ADAM JAY:
Oh, look at that. And I didn't even ask. And you don't even have to pay me later. True story. Y'all check it out. AJ, thanks for joining the show, man
DALE ZWIZINSKI:
Thanks AJ
AJ BRUNO:
Thanks guys. Appreciate it