.jpg)
Chief Executive Officers have long fielded criticism over their pay packages; amidst the current global recession, they’re under more scrutiny than ever. CEOs with poor earnings and growth results – and there are many – hear criticism from multiple fronts. The more rancorous of these critics say the growing gap between CEOs’ pay and the average earners’ represents a fundamental societal inequity. For free-marketers and the business community in general, however, the more relevant indictment of CEOs’ pay isn’t size, but its correlation to performance. The question most ask is, “Does the CEO’s performance merit their high level of pay?”
Each year this question is asked, analyzed, and answered for another key position in many firms: the salesperson. Though not as well-paid or prominent as the chief executive, high-level salespeople nevertheless are among the more conspicuously compensated within the firm. And each year, their sales leadership and compensation departments analyze corporate return on sales compensation investment.
In this Sales Management Association Research Brief, compensation experts Mike Rose and Sal DiFonzo pose the question: What if CEOs were held to the same pay-for-performance standards as the typical salesperson in their organization? Their findings provide a few surprises, as well as a compelling illustration of how sales compensation ROI is calculated.
