The Complex and Quickly Evolving State of Sales Compensation with Graham Collins

The GTM Kickback! #49 – Graham Collins

Released: April 6, 2022

Few topics stir as much debate among GTM leaders as sales compensation. It’s the heartbeat of revenue teams—and one of the fastest-changing parts of SaaS right now.

On this episode of The GTM Kickback!, I sat down with Graham Collins, Chief of Staff (and self-proclaimed “resident Sales Nerd”) at QuotaPath. Graham has run nearly 300 comp plan consults, built and led SDR teams, and helped countless organizations design comp plans that actually work. We dug into how sales compensation has shifted over the last 18 months, why transparency matters more than ever, and where things are headed next.

The Pandemic Effect: Why Comp Changed So Fast

When the pandemic hit, many companies froze hiring or downsized sales teams. Fast forward a year, and those same organizations were scrambling to scale—triggering a massive spike in salaries and OTEs.

• OTE growth: Up 20–30% year over year in many roles.

• Geographic flexibility: Remote work unlocked San Francisco salaries for reps in Portland, Maine—or anywhere else.

• Talent leverage: With more openings than candidates, reps gained bargaining power and could be pickier.

  
  

The result: unprecedented competition for talent, rising salaries, and new expectations for transparency.

OTE vs. Reality: Are Reps Actually Earning More?

Big OTE numbers grab attention—but are reps consistently hitting them?

Graham pointed out a key distinction:

• OTE (On-Target Earnings): Base salary + variable if you hit 100% quota.

• Actual earnings: What the average rep makes (often far less).

  
  

Some companies dangle $300K OTEs while their average rep earns $200K. In today’s market, candidates are asking tougher questions: What’s the average attainment? How many reps hit quota? What resources will I have to succeed?

“Transparency in earnings is critical. If you’re promising a $300K OTE but the average is $200K, you’re setting reps up for disappointment.”

The Quota-to-OTE Ratio

One of the most important metrics in comp design is the quota-to-OTE ratio:

• Historic SaaS benchmark: 5:1 (e.g., $100K OTE tied to a $500K quota).

• Recent trend: Dropped closer to 4.5:1, making quotas slightly more attainable.

• Enterprise shift: In mature orgs, ratios creep back up (6–8:1) as resources and support scale.

  
  

That 0.5x difference may not sound big—but it can mean the difference between average reps hitting quota or falling short.

Why Transparency Wins

Sales reps today have options—and they’re using them. Companies that hide details lose credibility. Companies that embrace transparency win trust.

Smart organizations now:

• Share average, top, and bottom earnings during the interview process.

• Publish OTE ranges directly on job postings.

• Provide clear promotion paths and timelines.

• Standardize comp plans to avoid inequities (which disproportionately impact women and people of color).

  
  

Communities like Pavilion, RevGenius, and platforms like RepVue are amplifying this transparency, giving reps more power than ever.

Graham’s Rules for Great Comp Plans

Graham left us with three guiding principles for comp design:

1. Simple. Easy to understand—no gimmicks, no convoluted math.

2. Logical. Align incentives with company goals (e.g., pay more for multi-year deals).

3. Fair. Treat reps with respect—no cliffs, no double standards between managers and ICs.

   
   

And above all: be transparent.

Final Thought

Sales comp is more than numbers—it’s culture, trust, and growth strategy wrapped into one. As salaries rise and reps gain leverage, companies that build simple, fair, and transparent plans will not only attract top talent but also keep them.

As Graham put it: “Comp plans should be simple, logical, and fair. Do that, and transparency takes care of the rest.”