OTE Pay Mix for SDRs and AEs: 50/50, 60/40 or 70/30?

A 50/50 split says "you're paid mainly for results." A 70/30 split says "we're paying you for steady, controllable work, with a bonus for outcomes." Neither is better, but each attracts and keeps different people and encourages different behavior.

Too much variable pay for a role that lacks control produces stress, short-term tactics and turnover. Too little variable pay for a role that controls the result produces comfort and slow effort. The purpose of the split is to match the risk the rep carries with the influence they have.

Also remember that the split interacts with quota. A generous variable share attached to an unreachable quota is a low base pay in disguise. Look at the relationship between quota and OTE whenever you change either.

SDRs typically create meetings or qualified pipeline, and closing depends on someone else. That points to a bigger base and a smaller variable share tied to things they control.

When designing SDR pay, ask:

• What can this person control directly: meetings held, qualified opportunities created, response speed?
• Is variable pay tied to meetings that are held and qualified, not just booked?
• Does a heavy variable share push reps to book poor-fit meetings?
• Is there a secondary component, such as a bonus when their pipeline converts, that keeps them aligned with quality?

The SDR compensation guide goes deeper on measures and quality safeguards. Keep the structure simple: two or three measures at most, since reps can't optimize five things at once.

AEs run the deal and control much of the result, so they usually carry more variable pay than SDRs. Three factors move the split:

1. Sales cycle length: in a long cycle, months pass before pay reflects effort, so more base keeps good reps from leaving between deals.
2. Deal size and complexity: large, multi-stakeholder deals depend on factors the rep can't control, such as budget approvals and procurement, which supports a larger base.
3. Company stage and brand: if your product is new and pipeline is thin, a very high variable share asks the rep to take your risk. A more established company with inbound demand can support more variable pay.

The debate between 50/50 and 70/30 splits is common. See fifty-fifty versus seventy-thirty variable pay for a fuller comparison of when each fits.

Modeling makes the choice concrete. Say on-target earnings are $160,000. In this example, a 50/50 split gives $80,000 base and $80,000 target variable, and a 70/30 split gives $112,000 base and $48,000 target variable.

Now compare a rep who reaches half of quota. In this example, the 50/50 rep earns $80,000 plus $40,000 for $120,000 total. In this example, the 70/30 rep earns $112,000 plus $24,000, for $136,000. Also in this example, both plans pay $160,000 at full quota. And in this example, a rep at 150 percent earns $200,000 on the 50/50 plan (before any accelerator) and $184,000 on the 70/30 plan.

The 50/50 plan pays the high performer more and the low performer less. Ask which behavior you want, and whether you have enough top performers to justify the difference. Then check that the total cost at each level fits your margins.

Before you announce a plan, run these checks:

1. Model payouts for your current team at last year's results and see who would have earned what.
2. Check whether the plan would have paid a strong performer well and an average one fairly.
3. Compare total cost with the revenue produced, at low, target and high performance.
4. Ask a few reps to explain the plan back to you. If they can't, simplify it.
5. Review plan mechanics with an employment attorney or advisor, since rules on pay differ by location.

Comp software such as QuotaPath or CaptivateIQ can model scenarios and show reps their expected earnings, though you should confirm the exact features in a demo. Whichever you use, review the split annually, and after any major change in sales cycle, deal size or territory. See tools compared for help choosing.