This month’s Ask BHG covers two questions we hear often about sales compensation governance: where comp plans create legal exposure, and how to win leadership support when the current process seems to be working.
What are the most common legal exposures in comp plans?
Unclear language about when commissions are earned, inconsistent handling of payouts after termination, undocumented exceptions, missing windfall provisions, and plans launched without signed acknowledgements. Remember that courts tend to look at how a plan was actually administered, not just what’s written, so inconsistent application creates risk even when the document looks solid.
How do we get buy-in from leadership when they think the current process works?
65% of firms say they need to improve governance; refer to that, rather than any internal gap. Frame governance as protecting the people already doing the work and as cost avoidance, since building it now costs far less than remediation after an audit finding or dispute.
For answers to these questions and more about governance, watch our webinar From Scramble to Strategy: Sales Compensation Governance Made Simple with Elizabeth Evans.
Have a sales comp question?
Email [email protected] for a chance to be featured in an upcoming issue of our new monthly newsletter, Comp & Circumstance.
