Salary as portion of revenue?

[Anonymous]

How closely is salary typically associated with the revenue you directly generate at your company? I directly contribute to roughly $400K-$450K in revenue a year (this is my direct billable work product, in addition to my other management duties) but only make $155K (plus a variabel bonus). I know there is other overhead, but this seems kind of low to me. Is there some sort of standard/average figure here?

[Anonymous]

For billable people the ratio is typical 1/3 comp, 1/3 overhead and 1/3 profit.

I don't think revenue to salary correlates as closely in other industries. For example, maybe you're in sales and you sell $1 million of product but the gross margin on the that product is only 40% then you couldn't ask for 1/3 of revenue to be comp because then there wouldn't be much left over to cover overhead.

[Anonymous]

Anonymous wrote:For billable people the ratio is typical 1/3 comp, 1/3 overhead and 1/3 profit.

I don't think revenue to salary correlates as closely in other industries. For example, maybe you're in sales and you sell $1 million of product but the gross margin on the that product is only 40% then you couldn't ask for 1/3 of revenue to be comp because then there wouldn't be much left over to cover overhead.

Thanks, good to know. I guess I am at a pretty appropriate level in that case. Better get my billing up even more!

[Anonymous]

I generate 12-14 mil and get 10-12%.

[Anonymous]

Anonymous wrote:I generate 12-14 mil and get 10-12%.

What do you do and how do you get in?

[Anonymous]

I get 5% commission over 5 million. You need to bill more.

[Anonymous]

NP. My revenue target is $2.5m. What should my total comp be?

[Anonymous]

Anonymous wrote:NP. My revenue target is $2.5m. What should my total comp be?

Depends on what the costs are.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I generate 12-14 mil and get 10-12%.

What do you do and how do you get in?

Sales, I basically get 1/4 to 1/3 of gross profits.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I generate 12-14 mil and get 10-12%.

What do you do and how do you get in?

Sales, I basically get 1/4 to 1/3 of gross profits.

I love how sales guys pretend they “contribute” to the profit, as if they actually made the widgit or tested it for quality or all the other bits that go into it.

They are just way better at negotiating for their cut; look at software engineers, they figured out how much they contribute and went from Office Space comp to Greed is Good.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I generate 12-14 mil and get 10-12%.

What do you do and how do you get in?

Sales, I basically get 1/4 to 1/3 of gross profits.

I love how sales guys pretend they “contribute” to the profit, as if they actually made the widgit or tested it for quality or all the other bits that go into it.

They are just way better at negotiating for their cut; look at software engineers, they figured out how much they contribute and went from Office Space comp to Greed is Good.

The OPs question can be interpreted in at least two ways depending on how you read "the revenue you directly generate at your company"

1. In some industries the salesman or big law attorney or inventor would say that they directly generated the income for the legal case or house or project because it would not have happened without their special contribution. I think of this as the commission model where the person gets a fraction of the revenue, although a lot of other people also do a lot of work to get the task done. I have heard of cases where that person may get a quarter of the revenue because getting the sale (or designing the invention, etc) is hard to do and the company rewards that.

2. In other industries, it is more like my experience as a state government contractor: My gross pay was about $40/hour and I charged my time to a specific contract. The company sent bills to the government and charged them about $110/hour. The formula was a little more complicated than that but not much: company revenue was my salary times a multiplier.
My salary was about 36% of revenue.