Salary Snapshot- VP Sales
Let’s talk money!
This month we’re sharing salary insights for VPs of Sales, based on searches we’ve worked on in 2020 and thus far in 2021. Our clients are often startups and scale-ups, which means hockeystick-level growth is critical to growing their business, securing further funding rounds, and gaining market traction. Alongside other key functions like development, product, marketing and more - sales (and their leaders!) are mission critical to achieving growth plans.
Data on sales salaries is strangely elusive compared to other roles - perhaps it’s because the numbers are high. This makes the information that much more valuable, especially when it’s often hush hush. We’re here to draw the curtain because knowing market rates will help with budgeting and creating competitive compensation packages. And if you’re on the hunt for your next challenge, we hope you’ll find this useful in the negotiation process.
What are you looking at?
Most of our recent searches focused on Canadian talent, but a couple were open to candidates in the US. With that in mind, we separated compensation by US and Canada, and the currencies follow suit.
Sales professionals have a larger split between base cash compensation and incentive at every seniority level, often listed as commission. In some cases, commission is represented as a [very] large bonus but for the sake of simplicity, we labeled them all as commission.
Keep in mind: We support organizations looking for the cream of the crop - the best of the best. Our sample is for product-oriented tech companies with talent who've demonstrated staying power. Consider these numbers the top 20-25% of the market - which, in most cases, is exactly what you’re looking for.
Let’s dive in, shall we?
Unlike other roles (development in particular) Canada and the US have similar pay structures in sales leadership, currency notwithstanding. In both countries the average base salary is around $220K, the average commission is near 80% of base, with total comp is around $385K. The salaries ranged from 150K CAD to 600K CAD.
While individual contributor sales reps often have a 50/50 split between base and commission (i.e. 100k base, 100k commission for on-target-earnings of 200K), sales leaders often have a 60/40 or 70/30 split. Their compensation is heavier on base and lighter on commission.
Sales leaders focus on people leadership and on long-term strategy, vision, execution - less on day to day deal ownership. While they may get pulled into “whale deals” (large enterprise deals), they’re typically hands off.
However (yes, there’s always an exception) - as we mentioned above, many of our clients are startups and scaleups. For startups in particular, they often look for a “Player-Coach”. This means the leader will close deals hands on and lead strategy, the team, etc. In those cases, we usually see a 50/50 split.
There’s also the question of capped vs uncapped commission: Capped commission is as it sounds - the leader has a “limit” on how much commission they can make, whereas uncapped commission is unbounded. The more they or their sales organization sells, the more they make. Often accelerators are in the picture as well, meaning after the team hits their goals, they make a higher percentage of commission on each deal after that. Nine times out of ten, our clients offer uncapped commission plans to incentivize their leaders to go above and beyond targets - and the best sales leaders will demand uncapped plans.
Those are large numbers, huh? When we discuss average sales leadership compensation with first-time founders, sometimes it freaks them out. Don’t fret, that’s normal. What we tell them is this:
Sales leaders prove their worth in very tangible, measurable ways because they’re directly tied to a number. Spending almost $400K on one employee may seem daunting at first but remember - about half of that is dependent on them bringing you cash flow. If you snag a great sales leader (psst - that’s what we’re here for!) they more than “prove out” their value within the first year. In other words, they pay for themselves.
That being said, equity is also a great lever if cash compensation becomes tricky. Some leaders are willing to forego cash compensation for a great equity package - especially in sales, where they can directly drive the organization’s growth.
Our snapshots are not typical salary surveys - as they represent only the data we’ve collected from a handful of recent searches. We think it’s pretty useful though, as it represents current information from a sample of individuals who we’ve carefully selected as having credible and validated experience, with successful local companies.
What’s behind the data?
Each Salary Snapshot represents between 20 – 50 sources.
Each source is an individual who we deemed a promising candidate for a role within a high growth tech company. Most are gainfully employed and many were recommended as exceptionally talented. As a result, our salary numbers might be skewed towards the top of the range.
We elected not to show compensation figures related to equity or options. It’s often tough to put an annual $ value on equity.
Specific details that would identify an individual or their employer will not be shared for obvious reasons.