Do You Like Writing Commission Checks? As a CEO, You Should Love It.
The Mindset Shift: Commission as a Growth Indicator
If you’re a CEO, there’s one check you should enjoy signing every month: your sales commission checks. Why? Because every commission paid represents revenue earned, markets won, and customers gained. Commissions are not an expense to be tolerated —they are proof that your business is growing.
But let’s be clear. Not all commission plans are created equal. When designed thoughtfully, they incentivize performance, reward your salespeople for going above and beyond, and protect your company’s margins. When designed poorly, they can sink profitability, create resentment on your team, or even encourage the wrong kinds of selling behavior.
When Done Right - Sales Can Be the Best Paid Role in the Company
Sales is the lifeblood of your business. Without revenue, the rest of the operation - from engagement to delivery - has no engine to run. That’s why a well crafted sales plan keeps the team motivated to grow the business. More sales equals more commissions, and that is what we want.
The best compensation plans recognize this. They create an environment where success compounds, where salespeople see a direct connection between their effort and their reward. That’s how you retain talent, build loyalty, and push performance into the top tier.
What Makes a Great Compensation Plan?
A great plan strikes the right balance between generosity and sustainability. Here are the key elements:
Alignment with Strategy
Your plan should reinforce the type of growth you’re aiming for. Want recurring revenue? Pay more for multi-year contracts. Need to break into a new market? Put accelerators on new-customer deals.
Clear and Simple Structure
If a salesperson can’t calculate their commission on the back of a napkin, the plan is too complicated. Confusion breeds distrust. Clarity builds trust.
Proportionality
Commissions must be tied to actual company profitability. Every sale has associated costs: delivery, overhead, support, and admin. If commissions eat into those margins, your company may look busy but bleed cash.
Upside Without Limits
Your best performers should never feel capped. If they crush quota, let them crush their paycheck. Nothing motivates a high performer more than unlimited earning potential.
Incentivizing the Right Behaviors
Comp plans are more than math—they’re behavioral blueprints. The wrong incentives encourage the wrong outcomes. For example:
Overpaying for one-time sales may discourage focus on recurring revenue.
Paying only on revenue without margin consideration may lead to discounting wars.
Complex multipliers can frustrate rather than inspire.
The right incentives encourage salespeople to:
Focus on the highest-value deals.
Sell solutions that strengthen customer loyalty.
Drive sustainable growth rather than short-term wins.
Protecting the Business Side
Here’s the flip side: a commission plan should never sink the ship. The CEO’s role is to ensure the business remains profitable while rewarding performance. This means backing commission structures into actual bottom-line realities.
Model Every Scenario: Before launching a plan, run simulations for different outcomes. What if someone doubles the quota? What if every rep just hits 50%? Make sure you can afford both ends of the spectrum.
Create a Pricing Tool: Be sure to include what the company keeps after costs, not just what it books. That way, you’re incentivizing profitable growth.
Build in Safeguards: Clawbacks for churn, thresholds for margin protection, and checks against excessive discounting keep the plan from eroding profitability.
The CEO’s Perspective: Leading Through Compensation
Great leaders view sales compensation as a strategic lever, not a financial burden. When you embrace commission as a driver of growth, you create a culture where salespeople feel valued, motivated, and aligned with your vision.
Instead of dreading those checks, you celebrate them. Each one means your company is stronger than it was the day before. Each one is evidence that your strategy is working. Each one signals to your team: “We win together, and when you win, the company wins too.”
Implementation: Moving From Theory to Practice
Designing a great comp plan requires both strategy and discipline:
Audit Your Current Plan
Does it align with today’s goals, or yesterday’s? Many plans stay on autopilot long after the strategy shifts.
Engage Your Sales Leaders
Your managers know what motivates the team. Bring them into the design process to balance executive goals with front-line reality.
Test Before Launch
Roll out models, run numbers, and stress test. Avoid launching a plan only to discover it’s too rich or too stingy.
Communicate Clearly
A comp plan is only as strong as your team’s understanding of it. Train your salespeople, explain the “why,” and show how their success contributes to company growth.
Review and Adjust
The market changes. Your business evolves. Compensation plans should never be static. Commit to reviewing at least annually to ensure alignment.
Conclusion: Celebrate the Check
When done right, commission is not just a line item—it’s the ultimate scorecard. Paying it means your sales team is performing, your business is winning, and your strategy is working.
So ask yourself: Do you like writing commission checks? If not, maybe it’s time to revisit your compensation plan and your perspective. Because as a CEO, you should love it. It’s the best indicator of growth you can hold in your hands.