Salesman who helped land Veritas UK's 'largest ever' deal was lawfully docked £275k in commission, says judge

You win some, then you lose some


A Veritas salesman had £275,000 in "windfall" commission withheld after helping land "the largest ever deal in Veritas's history" – and a judge found a clause in his employment contract which made it lawful to do that.

Danny Johnston failed to prove that Veritas Technologies (UK) had unlawfully deducted the whopping sum from his February 2020 paycheque – meaning he was left with a mere £232,000 with which to console himself.

Despite showing Employment Judge Jim Young a copy of an email from Veritas's UK managing director praising him for being part of its "HSBC team that last year signed the largest ever deal in Veritas's history," Johnston failed to prove that he was legally entitled to the £275k commission, over and above the £232k the company did pay him.

Having joined Veritas's UK operations in 2017 as an "enterprise customer success manager 4 grade SO6," Johnston enjoyed a base salary of £125,718. His contract said his on-target commission was £80,000, additional to his salary, while he was entitled to the usual percentage cut of any big deals he landed.

So when Johnston played a significant role in landing $12.6m of business for Veritas's UK operation, as part of a three-way UK-US-Asia deal, he was delighted – and when Veritas's internal systems showed him "compensation data" including £505,564.78 in commission you can imagine he was over the moon.

But it was not to be. Johnston fell partial victim to what a judge in another case described as a "safety net" clause, and inside Veritas was known as a "windfall". The half-million payout was more than 250 per cent of Johnston's usual commission and that triggered an internal review.

Veritas's Incentive Compensation General Terms and Conditions said:

A "windfall" is defined as a situation where a participant's earnings far exceeds the Participant's annual On Target Commission (OTC) due to unanticipated large transaction(s) not included in quota setting, or a large transaction(s) during a plan year which requires unusual or significant management involvement...

Louise Ford, Veritas UK's senior director of sales ops, along with international sales veep Mark Nutt, duly decided to do that thing, having considered how much of a role Johnston played in landing the sale. An internal grievance process merely upheld their decision.

While finding that the HSBC deal was not "unanticipated" because it was a renewal of an existing three-year contract, and that Veritas's management had failed to properly follow internal processes for examining windfalls, Judge Young said the controversial clause wasn't relevant at all.

Instead, he found, another part of the sales compensation plan about quotas explicitly allowed Veritas to decrease quotas after a sale in situations where they "were not set to reflect sales not anticipated or where sales were not reasonably certain at the time sales quotas are established or where errors are made in quota setting."

The ruling also quoted this clause as being relevant:

The company reserves the right to adjust quotas at any time (prospectively or retroactively) at the company's sole discretion with or without prior notice, subject to applicable local law...

Veritas had pleaded that Johnston's quota was mistakenly set too low for FY20 and, despite all the legal arguments about windfall clauses, Judge Young said this clause on its own was enough to justify the company's actions.

"Notwithstanding that reliance was not placed upon this paragraph by the respondent as matters with the claimant developed, I did not consider that was a bar to consideration of its terms," said the judge in his written decision, published early last week.

Johnston's claim for unlawful deduction from wages failed. ®


Other stories you might like

  • Robotics and 5G to spur growth of SoC industry – report
    Big OEMs hogging production and COVID causing supply issues

    The system-on-chip (SoC) side of the semiconductor industry is poised for growth between now and 2026, when it's predicted to be worth $6.85 billion, according to an analyst's report. 

    Chances are good that there's an SoC-powered device within arm's reach of you: the tiny integrated circuits contain everything needed for a basic computer, leading to their proliferation in mobile, IoT and smart devices. 

    The report predicting the growth comes from advisory biz Technavio, which looked at a long list of companies in the SoC market. Vendors it analyzed include Apple, Broadcom, Intel, Nvidia, TSMC, Toshiba, and more. The company predicts that much of the growth between now and 2026 will stem primarily from robotics and 5G. 

    Continue reading
  • Deepfake attacks can easily trick live facial recognition systems online
    Plus: Next PyTorch release will support Apple GPUs so devs can train neural networks on their own laptops

    In brief Miscreants can easily steal someone else's identity by tricking live facial recognition software using deepfakes, according to a new report.

    Sensity AI, a startup focused on tackling identity fraud, carried out a series of pretend attacks. Engineers scanned the image of someone from an ID card, and mapped their likeness onto another person's face. Sensity then tested whether they could breach live facial recognition systems by tricking them into believing the pretend attacker is a real user.

    So-called "liveness tests" try to authenticate identities in real-time, relying on images or video streams from cameras like face recognition used to unlock mobile phones, for example. Nine out of ten vendors failed Sensity's live deepfake attacks.

    Continue reading
  • Lonestar plans to put datacenters in the Moon's lava tubes
    How? Founder tells The Register 'Robots… lots of robots'

    Imagine a future where racks of computer servers hum quietly in darkness below the surface of the Moon.

    Here is where some of the most important data is stored, to be left untouched for as long as can be. The idea sounds like something from science-fiction, but one startup that recently emerged from stealth is trying to turn it into a reality. Lonestar Data Holdings has a unique mission unlike any other cloud provider: to build datacenters on the Moon backing up the world's data.

    "It's inconceivable to me that we are keeping our most precious assets, our knowledge and our data, on Earth, where we're setting off bombs and burning things," Christopher Stott, founder and CEO of Lonestar, told The Register. "We need to put our assets in place off our planet, where we can keep it safe."

    Continue reading

Biting the hand that feeds IT © 1998–2022