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I know a guy who got hired to lead a major startup's enterprise sales team that had been floundering. They had a couple guys running it for a year and they hadn

I know a guy who got hired to lead a major startup's enterprise sales team that had been floundering. They had a couple guys running it for a year and they hadn't had any success, and they agreed to give him uncapped commissions. My friend is an animal and came right in with a plan and process, making 80 calls a day, working all of his contacts, grew the pipeline, and over a year made nearly $1 million in commissions. Then they CFO backed out on the agreement! "You can't make this much money, you would be the highest paid employee." Even though he made them far, far more than he took in. He stayed and got a decent chunk of cash but had to settle mostly for stock options (recent update: massive covid layoffs!). If you are paying a sales commission it's because they made you more money. It's called incentive alignment.

gamblor956 7y ago
That doesn't sound like a true story. If they had a legal agreement to pay him unbound commissions the CFO can't just change it after the fact whether or not the salesperson would be the highest paid employee. (Fun fact: at most B2B companies, the sales teams are the highest paid employees outside of the C-suite executives.)
- psds2 7y ago
  Yes, the CFO can. Even more outrageous, if the CFO did then then the person seibelj knows would be forced to litigate the matter in civil court and ask to have the legal agreement enforced. There is a chance his state employment office would help, but likely the law is more complex than they are equipped to deal with.
  - gamblor956 7y ago
    No, the CFO can't. This is not just a civil matter, it's a Dept of Labor matter. The law is relatively simple on this matter: if the company entered into a contract to pay commissions, and the agent satisfied the terms of those commissions, then the company is required to pay the commissions absent a bankruptcy that eliminates or reorganizes the debt. On top of that, based on the facts provided, the CFO has committed an intentional tort--interference with contract, meaning that punitive damages are available, i.e., up to 3x actual damages. Yes, it would require the individual to go to court. The likely outcome is that he would receive a very large sum of money, and the CFO would likely get blacklisted from CFO and finance positions at any reputable company.
    - seibelj 7y ago
      It's all upper management stuff, he got paid but took it in equity more than cash. He still works there, didn't want to burn bridges. Dispute resolution like this is not uncommon.

gamblor956 7y ago

That doesn't sound like a true story. If they had a legal agreement to pay him unbound commissions the CFO can't just change it after the fact whether or not the salesperson would be the highest paid employee. (Fun fact: at most B2B companies, the sales teams are the highest paid employees outside of the C-suite executives.)

psds2 7y ago
Yes, the CFO can. Even more outrageous, if the CFO did then then the person seibelj knows would be forced to litigate the matter in civil court and ask to have the legal agreement enforced. There is a chance his state employment office would help, but likely the law is more complex than they are equipped to deal with.
- gamblor956 7y ago
  No, the CFO can't. This is not just a civil matter, it's a Dept of Labor matter. The law is relatively simple on this matter: if the company entered into a contract to pay commissions, and the agent satisfied the terms of those commissions, then the company is required to pay the commissions absent a bankruptcy that eliminates or reorganizes the debt. On top of that, based on the facts provided, the CFO has committed an intentional tort--interference with contract, meaning that punitive damages are available, i.e., up to 3x actual damages. Yes, it would require the individual to go to court. The likely outcome is that he would receive a very large sum of money, and the CFO would likely get blacklisted from CFO and finance positions at any reputable company.
  - seibelj 7y ago
    It's all upper management stuff, he got paid but took it in equity more than cash. He still works there, didn't want to burn bridges. Dispute resolution like this is not uncommon.