Cisco has instituted a cap on the commissions it pays to sales staff, The Register has learned.
A Cisco staffer tells us that some account managers could lose as much as 25 per cent of their compensation, due to an edict sent out last week. The new is retroactive, meaning the company will attempt to recover some commissions it has already paid.
For some, this could represent a pay cut of up to US$45,000, and the retrospective change means some account managers and pre-sales technical consultants will not receive any above-salary compensations for some months.
Our source suggests the new arrangements are the work of Cisco's Chuck Robbins, who in his previous role was in charge of the company's worldwide sales operations. We're told the change has gone down badly, because sales kick-off meetings were recently told that compensation wouldn't be changed.
One account manager told The Register commissions were formerly paid on how far an account manager exceeded their budget, and “uncapped” meant a star would get compensation on every dollar of sales over their budget.
In an e-mail seen by The Register, a director explains that various US sales regions will be "re-goaled" to 150 per cent, adding that the company had originally wanted the cap to be 140 per cent.
“Re-goaled to 150 per cent” refers to compensation being capped at 150 per cent of the account manager's sales target. If someone was on a target of $10 million and sold $20 million, their commissions would only be paid for $5 million of the above-target sales.
The Register has approached Cisco for comment but has not received a response at the time of publication. ®
Updated: Cisco has responded with the following: “We cannot speak to the individual employee described in the article, but reject any suggestion that Cisco has made sweeping changes to the goals or commissions of our salesforce.” ®