Pay structure modelReviewed by Adroit Staffing editorial reviewPractice guidance, no data claims9 min read
The short answer
Work forwards from your own numbers: what the seat should produce in a year, what share of the resulting margin the plan can afford, and how much risk it is fair to ask the person to carry. That gives you a package envelope and a split. Then test whether anyone in the business has ever produced the number you are about to put in the advert.
Key facts
- Start from
- Expected production, not a market range
- Envelope set by
- Gross margin and allowable cost of sale
- Split set by
- Cycle length and how much risk the seller carries
- Final test
- Has anyone here produced that number?
Setting OTE for a role you have not hired before
You can reason your way to a defensible package from your own numbers: what the seat is expected to produce, what margin that carries, and how much risk it is fair to ask the person to take. Market data is a sense check on that answer, not a substitute for it.
How to read the figures on this page
This is a method, not a market reference. Every number in the examples is illustrative arithmetic. Where you need a market sense check, use a dated published source or ask us — we will say plainly if we do not have reliable evidence for a seat.
What the data labels mean
- Sourced market data
- Taken from an external published source, cited with the date it was read.
- Adroit original data
- Drawn from our own briefs and placements, with the method described below.
- Explanatory guidance
- Explains how pay is structured. Makes no claim about current market levels.
- Illustrative example
- Arithmetic to show how the structure works. Not a market range.
- Source required
- Defined but not published: we do not hold data we can attribute yet.
The order to work in
Explanatory guidanceEach step uses your own data, so the resulting package can be defended internally and to the candidate.
| Step | What you decide | Evidence you use |
|---|---|---|
| 1. Production | What the seat should produce in a full year | Your existing conversion and deal size data |
| 2. Affordability | What share of that the plan can spend | Gross margin and current cost of sale |
| 3. Split | How much of the package is at risk | Cycle length and how much pipeline the seller creates |
| 4. Achievability | Whether the quota is genuinely reachable | Attainment of anyone already doing similar work |
| 5. Sense check | Whether the package is competitive | A dated external source, or specialist input |
| 6. Advert | What you publish | Base and OTE both stated, with the split |
Sense-checking against the market
Source requiredWe do not publish benchmark ranges to check your number against, because we do not currently hold market data we can attribute per role, region and segment.
No figures are published in this block yet.
Before it publishes we need:
- A named publisher, a URL and the date the figure was read, for each range.
- Coverage split by region, company stage and segment rather than one national figure.
- A sample description: how many roles the figure covers, and over what period.
- A re-check within the six-month refresh cadence, or the figure is removed.
What moves the number
Direction of travel only. We do not publish a percentage uplift for any of these unless the size is evidenced.
First hire into a new motion
Explanatory guidanceTends to push pay up
Where there is no proven conversion data, the seller carries more risk than the plan can measure. A stronger base, or a longer ramp guarantee, is usually the honest answer.
Inherited pipeline or territory
Explanatory guidanceTends to push pay down
A seat handed a warm territory carries less risk, which supports a larger variable share — provided the quota reflects the head start.
Confidential or replacement hire
Explanatory guidanceMoves pay in either direction
Replacing an underperforming seat often reveals that the quota, not the person, was the problem. Re-derive the number before repeating the package.
Equity and bonus
Leadership packages: equity and bonus
Explanatory guidance- For Head of Sales and above, the variable element usually mixes team attainment with a smaller number of company objectives — retention, hiring, or margin.
- Equity terms matter more than the headline percentage: vesting schedule, cliff, option class, exercise window and what happens on a change of control.
- State whether the grant is options or shares, and whether the strike price is already set. Candidates at this level will ask, and vagueness reads as a warning.
- We publish no equity percentage bands. Grant sizes vary by stage, dilution history and cap table structure, and a generic band would be misleading rather than helpful.
- Where a bonus is discretionary, say who decides, against what, and when it is paid.
Worked examples
Working backwards from production
Illustrative example- Expected annual production
- 1,000 units of revenue
- Gross margin
- 70%
- Cost of sale the plan allows
- 20% of margin
- Total package envelope
- 140 units
Illustrative arithmetic with invented inputs. The method matters: substitute your own production, margin and allowable cost of sale, then split the envelope into base and variable.
Testing achievability before you advertise
Illustrative example- Proposed quota
- 1,000 units
- Best current performer
- 800 units
- Team median
- 550 units
- Conclusion
- The quota is not yet credible
If nobody in the business has produced the number you are asking a new hire to produce, the OTE is a forecast nobody has met. Fix the quota, not the advert.
Method and refresh
- Structure and definitions are reviewed twice a year, and immediately if a legal or reporting requirement changes.
- Any figure carries the publisher and the date it was read, beside the figure rather than in a footnote.
- Where we use our own placement and brief data, we say how many roles it covers and over what period.
- A figure whose source has not been re-checked within the cadence is removed rather than left standing.
- Refresh cadence
- Reviewed every six months, and whenever a cited source publishes an update.
- Next review due
Use this with
- How sales compensation is structured
The components of a package and what to check about each one.
- How to hire an Account Executive
The brief, the evidence to look for and the usual failure points.
- Sales career map: SDR to CRO
Where each seat sits, so a package can be pitched at the right level.
- Common sales commission structures explained
Choosing the mechanism once you know the envelope.
The most common mistake
Setting OTE by copying an advert. A competitor's number encodes their margin, their cycle length, their inbound volume and their brand — none of which you inherit by matching their figure. Copying it produces either a package you cannot afford or a quota nobody can hit.
Derive the number from your own business, then use external evidence to check whether the answer is competitive rather than to generate it.
For a first sales hire
- There is no conversion data, so the quota is an estimate — price the base accordingly.
- Give a longer ramp than feels comfortable, and write down what happens at the end of it.
- Set milestones that are not revenue for the first period: qualified conversations, a repeatable pitch, written discovery notes.
- Expect to revise the plan after two quarters, and say so at offer stage rather than discovering it later.
Where we can help
As part of a search we will tell you honestly whether the package we are being asked to take to market is competitive for the seat, and where the risk sits in the plan. Where we do not have reliable evidence for a role, region or segment, we say that rather than producing a confident-sounding range.
Common questions
- What if we cannot afford a competitive package?
- Then compete on something you can evidence — scope, progression, product, or a stronger base against a lower OTE. What does not work is an aggressive OTE standing in for a package you cannot fund.
- Should the first hire's OTE match what we plan to pay later?
- Rarely. The first hire carries more risk and less infrastructure, which usually justifies a stronger base and a longer ramp than the steady-state package.
- Can you tell us the market rate?
- We will give you an honest read from the searches we are actually running, and we will tell you where our evidence is thin. We do not publish uncited ranges on this site, and we will not invent one in a briefing either.
Sources and review
- Written by
- Adroit Staffing
- Reviewed by
- Adroit Staffing editorial review
- First published
- Last reviewed
Reviewed every six months, and re-checked whenever a cited source changes. Next review due by . If a figure here no longer matches what you are seeing, tell us and we will re-check it.
This page is practice guidance from our own Sales and GTM recruitment work. It makes no claims about current market data, so it cites no external figures.