AmEx Comp Plan Controversy

Palette Team

The Quota, a weekly sales newsletter, recently ran a piece about controversy at AmEx over its comp plan. According to the piece, American Express reportedly changed its sales compensation plan in May of 2022, and many reps subsequently had huge reductions in their commissions. This isn't the first time a large company has faced scrutiny over changes to its sales compensation plan, and any seasoned salesperson will likely have had unexpected changes to their comp plan at some point in their career.

When changes to sales compensation plans come as a surprise, it's usually a sign of deeper trouble within the realm of commissions. All too often, commission plans are designed without adequate data in place, and without measurement in place to track the efficacy of changes. On top of this, too many comp plans are rolled out without any form of bottom-up feedback, and are then miscommunicated internally.

This is a major missed opportunity for companies; sales commission structures are the single most important factor in sales incentivization and productivity, and are a major factor impacting revenue growth. Sales compensation plans should have on-demand measurement in place, allowing companies to drill down into what areas are causing underperformance and even allowing them to A/B test plans against each other. They should be designed with real-world feedback on what is within the realm of possibility. And finally, they should be communicated clearly and consistently; if a team is surprised by changes to a plan, it's a sign that more engagement with reps should have occurred. Automating the manual, spreadsheet-heavy work of commissions makes all of this doable without spending time and resourcing figuring it out.

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