offer-structures.md
title: Offer structures description: The structures that close a gap between expectation and ceiling, each priced on cost, signal and risk, plus how to choose between them.
Offer structures
Every structure closes some of the gap and says something to the candidate about the company. Price all three columns or the recommendation is a guess.
| Structure | Cost to the company | What it signals | Risk |
|---|---|---|---|
| Base increase | Permanent, compounds every review, sets the band for peers | "We value you at this level" | Internal fairness if peers earn less for the same role |
| Higher on-target earnings, same base | Only paid if they perform | "We back you to hit the number" | Feels like a trick if quota attainment on the team is low. Show the real attainment data |
| Sign-on payment | One-off, often with a clawback | "We will close the gap but not move the band" | Candidate hears the second half. Pair it with a dated review |
| Guaranteed commission during ramp | Fixed, time-limited | "We know the pipeline takes time to build" | Paying for a ramp that never ends. Set the end date and the handover rule in writing |
| Dated review with a trigger | Deferred, conditional | "We will move once you prove it" | Worthless without a date and a measurable trigger. "Six months" alone is a hope |
| Equity or options | Dilution, not cash | "We want you to stay" | Candidates discount equity heavily. Never use it to close a cash gap above about a third |
| Title or scope | Little cash cost | "Your career moves here" | Title inflation the rest of the team will notice. Be sure the scope is real |
| Start date or flexibility | Usually small | "We will meet you halfway" | Low. Often the cheapest way to close the last few percent |
| Buying out forfeited commission or bonus | One-off, matched to evidence | "We will not make you lose money to join" | Ask for the documents. Pay on proof, not on estimate |
Choosing
- Gap under 5% of total package: close it with start date, flexibility or a small sign-on. Do not move the band.
- Gap of 5 to 15%: combine a modest base move with a sign-on, or raise on-target earnings if the team's real attainment supports it.
- Gap above 15%: check the role level before the money. A gap this size usually means the candidate is pricing a bigger job than the one on offer, or the band is wrong for the market. Neither is fixed by a sign-on.
These thresholds are practice-based defaults, not a study. Tune them to your own offers.
Sales-specific checks
- Ask what the candidate was actually paid last year, not their on-target figure. Sales candidates often quote OTE, and the gap looks different on actuals.
- Show the commission plan in full before the offer: quota, accelerators, decelerators, caps, clawbacks, ramp.
- If the candidate is walking away from earned but unpaid commission, size it on documents and decide on a buy-out before the trial close, not after.
- A territory or account list is part of the package. A great base on a bad patch is a bad offer.