Discretionary Pay Is Not a Plug for Your Leaky Compensation Plan

Posted by Jason Brown on Mon, Jul 02, 2018

The other day I was speaking with a sales compensation director who had observed a peculiar correlation in her sales comp data. She compared the payouts that salespeople received for their quantitative bonuses—measures of direct sales results—to the discretionary payouts those same individuals received. Like many asset managers, this company uses a framework for determining discretionary pay but provides significant latitude to sales managers in deciding the actual rating for each individual.


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