DISQUS

Julien Dionne · 1 year ago

Hi Mark,

First, thank you for thinking leapcomp is "great" and for echoing the post here for your readers.

Secondly, a point I didn't make in my post, is that not only is it important to reward with the right amount, it is also important to encourage the right behavior (obviously!). It's not surprising that in investment banking, some people make millions in bonus, but one has to wonder how much money they actually made the company to deserve that money.

You say "When you design the right compensation plan, you can have top salespeople making a lot of money and the more they make, the BETTER it is for the firm." Yes! The RIGHT compensation plan does!

Going back to the market crisis and the sub-prime mortgage problem, when you look at banks incenting their reps for refinancing mortgages at a lower rate and after only a few months, often within the same institution, it is easy to realize there is a problem!

Mark I LaRosa · 1 year ago

Julien,

Exactly correct! Upon a re-read I certainly didn't make it obvious that the reason the comp plan was designed correctly was because it DID infact inspire the correct behavior.


I also focused heavily on the cost of the plan - not pointing out that the end-result was amazing for our company.