What Should I Pay A Director Of Sales And Marketing For A Security Integrator?

Hello, I was wondering if anybody could advise on a typical salary, commission, bonus and possible equity structure for a position like this.


See: Integrator Salary Results 2014

Very very roughly, I would say in the ~$150,000 range.

However, a lot has to do with:

  • Size of the integrator: is this the typical 10 to 20 man outfit or a regional or national integrator with hundreds or thousands of employees? Bigger the integrator, greater total compensation would be expected.
  • Location of the integrator: is the integrator based in a high priced city or in a rural area? Same job in NYC metro might pay 50% more than one in Missouri.
  • Experience of the person: is this person already proven at that level or will this be a promotion for a heretofore individual contributor.

John,

Thanks for the information. We are a regionial 20 man outfit. I would not consider us a high priced market, probably a mid level. This person is very well proven. Would the 150K be a base, or commission typically included in that? Do you know what percentage commission is typical for us?

A good range for on target earnings (OTE) for a SI like this would be about $110k - $135k, with about 60% base salary and the rest incentive based. Regarding equity, others can answer that better than I can.

However ... with 20 employees, I suggest investing all of your dollars in people that sell, not manage. With a decent process and the right system, the owner or GM will be able to manage the sales team and an organized administrator can facilitate an adequate marketing plan.

Unless the candidate really wants equity, I think equity would be a mess.

It's one thing to give equity if the company believes it is going public or going to be acquired soon, but otherwise, this person will now have equity in a fairly illiquid asset. You could certainly give them a percentage of profits annually in perpetuity but that becomes a pain to administer and is not going to be that much anyway.

Having equity in a closely held company is usually not meaningful unless or until the company is sold. Company net profit will be whatever the company's majority owners want it to be based on what they decide to take as there own compensation.

Morning All

Before I would pay for a sale manager with a director's title, I would first invest in an experienced Director of Business Development alone with at least two or thee business development consultants (the folks the director works with and manages) depending on just how large a coverage area you have.

Regardless of the title business development is generally defined as:

″Business development is defined as the tasks and processes concerning analytical preparation of potential growth opportunities, and the support and monitoring of the implementation of growth opportunities, but does not include decisions on strategy and implementation of growth opportunities"

Even if these glorified sales people never sell a thing there worth their weight in gold. If they never do anything except get an architect to include your spec and list your firm as a sole source with contact information, an address and a phone contact, on an on going basic. You win and that's a good thing!

Just a through or two...

I really appreciate everyone's advise. If we assume a 135-150K total compensation and 60% is a base salary, how would you structure the commission plan? A percentage of total company sales or only a percentage of new business he brings?

You generally want to encourage people to hunt new business, not farm existing stuff, or sit around entirely.

For the job you're talking about I'd probably consider the following structure:

(This is assuming a target of $750K new business, you'd adjust the multipliers below accordingly)

Base salary: $85,000

Quota: $750,000 (new business)

OTE: $140,000

Variable Compensation: $55,000

Multipler: .07334 for 0-110% of quota (they essentianlly get 7.334 cents for every dollar of sales)

Kicker: additional .0225 for 111%-120% of quota, .0300 for 121%+ of quota. Kicker is paid at end of Q1 of following year.

I have a basic sales compensation agreement and structure that you're welcome to if you want (John can provide you my contact info).

If you want, you can setup additional MBO's for things like pipeline growth, forecasting accuracy, etc. But I wouldn't over complicate things too much. A basic structure of base+bonus should be sufficient. You want to setup the base so that it's essentially enough to scrape by, but not enough to really "live" off of. I would usually try to find someones rough minimal required earnings and make that their base. You don't want your sales people to be sweating their ability to make their mortgage payments and stuff like that, but you also don't want to give them a base salary that makes them too comfortable either.

Another option is to do a recoverable draw on commissions, basically they can take commissions in advance of earnings but would have to pay that back if earnings don't happen. This too I would not recommend, but it can be a way to sweeten the offer if neccessary.

I really appreciate the help and all the details. How would you spin the plan he will have a team underneath him and he drove the business around them?

Keep in mind that your compensation plan should reward activity that you want, and discourage activity that you don't want. Do you want new clients? Do you want to get deeper and wider inside your existing client base? Do you want both? Are you looking for specific-size project work, or smaller, steady run-rate business with recurring revenues?

Compensation should be shifted to drive that specific activity. I've held a position similar to what you're describing, and we wanted to drive new business as well as grow our existing base. We found that these are two very different things that require at least a different mind-set, if not a different refined skill set. We based the incentive plan around those goals and mimized the incentive on everything else. The message was clear and it helped the entire team focus.

Once you settle on a base salary, I think the variable compensation piece should be weighted heavily towards your goals in the market and in the 2-5 year range. Try hard to put something together that you won't feel the need to change too often.

Hope that's helpful.

Greg

What are some resources where one can search for ideal candidates?

Hello Raymond,

Do you use Linkedin? I have heard from many people that it has helped them find legitimate candidates. Most people in my experience pay for a premium version of Linkedin so that they can access the enhanced search filters.

-Mike