SaaS Account Executive Compensation in 2020


This post is by Matt Bertuzzi from Inside Sales Experts Blog


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We’ve just released the 2020 SaaS AE Metrics Report. This marks the 7th round of this research project. Leaders from 287 SaaS companies shared their key metrics--growth rate, ACV, model, quota, comp, tech stack, and more. You can get a full copy of the report here, but I wanted to share one finding that really stuck out.

AE comp soars to new highs

Last year, I wrote about SaaS AE compensation continuing to outpace the broader US economy. saasae_v_usall
 
That’s a 52% increase since 2010 (~5% compounded annually). Compare that to SDR compensation, which has been flat since 2010 when adjusting for inflation.  In this report, we find median SaaS AE on-target earnings of $158K. More than 70% of respondents report OTEs in excess of $120K. Wow.

Quotas are rising, but not at quickly 

Median ACV quota rose from $625K in 2012 to $775K in 2020. This represents
ote_quota
compound annual growth rate of 3%. Clearly there is a divergence between productivity and compensation. ote_quota Dale Chang, Operating Partner at Scale Venture Partners, recently shared his thoughts on if the sales model is sustainable.
The fact that quotas haven’t kept up with compensation raises flags as to how sustainable these go-to-market models are in the long run.

Quota levels need to align with a company’s operating model, especially when Sales & Marketing often represents more than 50% of total Operating Expenses.

Sales efficiency measures a company’s return on Sales & Marketing spend. It’s an incredibly useful metric that investors and companies alike use to gauge the effectiveness of a particular sales model.
 
 
With a tight labor market and fierce competition for talent, it seems unlikely this trend will reverse any time soon.
 

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