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

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 …

  1. steviebuk Silver badge

    I assume he'll now loose all the rest paying all the legal fees.

    1. oiseau Silver badge
      WTF?

      Deduct from the legal fees

      Instead, he found, another part of the sales compensation plan about quotas explicitly allowed Veritas to decrease quotas after a sale ...

      It seems that the judge had a much clearer idea of what was going on there.

      Much more than the barrister asshat the poor chap hired who evidently did not have a close enough look at the "Incentive Compensation General Terms and Conditions" tome.

      Had he done so, he would (?) have advised his client properly instead of drawing him into a claim for unlawful deduction he could not possibly win.

      I say it is more than enough grounds to not pay any legal fees, at least to the asshat.

      O.

      1. General Purpose Silver badge

        Re: Deduct from the legal fees

        It's not unusual for clients to want to persist despite due warnings that their chances are low. If it's not fraudulent, criminal or repugnant to continue, then lawyers are likely to see it as their duty to continue, do their best, and let the judge hear the arguments, weigh the clauses and decide. To set themselves up as the judge, walk away and leave the client unrepresented would be extreme.

        Also, fees.

        1. oiseau Silver badge
          Facepalm

          Re: Deduct from the legal fees

          It's not unusual for clients to want to persist ...

          You're right, it is not.

          But ...

          If the report is indeed correct and the "Incentive Compensation General Terms and Conditions" that this chap's relationship to his employer was bound by stated that "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 ..., the only reasonable legal advise to be given was "don't do it".

          Granted, lawyers can by no means guarantee an outcome ie: a result.

          But they do have an obligation in kind ie: to do the best they can, without exception.

          In my opinion, the asshat does not seem to have done that.

          If it was as you suggest (could have been but, how to know?) the only reasonable and professional thing to do was to have his client sign a waiver to the effect of his wanting to go ahead with the lawsuit, in spite of what the T&C stated in no uncertain terms.

          I seriously doubt that such waiver exists.

          O.

    2. Michael Wojcik Silver badge

      I assume he'll now loose all the rest paying all the legal fees.

      And once loosed, it's likely lost.

  2. Lotaresco

    Back in the 80s...

    Someone I know was once given a sales portfolio of "unwinnable" contracts. The sales team had tried to bid for all of them but had failed. They were promised a 10% sales bonus on any of the contracts they could convert. A quick look made it clear that the pitches made to the potential clients hadn't been very good and the sales team were not interested in the capabilities of the systems. They just wanted to sell "product" and didn't care what it was. So every bid response was rewritten and tailored to the organisation letting the contract. Soon orders rolled in and within a year contracts for £10m let.

    When it came to bonus time the bonus paid was less than £60K. The employer was questioned about which bit of 10% they didn't understand. The response was "Yes, but we didn't think you'd make any sales. We're certainly not going to pay you £1m!" They left the company and the order book collapsed again.

    1. Alan Brown Silver badge

      Re: Back in the 80s...

      > The employer was questioned about which bit of 10% they didn't understand. The response was "Yes, but we didn't think you'd make any sales. We're certainly not going to pay you £1m!"

      I'm minded of Edison and Tesla

      And always getting such offers in writing, then checking that they're ironclad before proceeding

      1. Lotaresco

        Re: Back in the 80s...

        "And always getting such offers in writing, then checking that they're ironclad before proceeding"

        The problem being that just about every contract for sales staff specifies that bonuses can be withheld on a whim.

        I'm glad that as a scientist I didn't have much to do with sales, although even there we got shafted too. I worked for a company that made a product that was brining in about £3m a year. Sadly it was costing about £2.5m to manufacture. I was asked to have a look at it and work out a way to reduce costs. I examined the manufacturing process and worked out the most length and expensive part of manufacture was completely unnecessary and came up with a much cheaper alternative. Cost of manufacture per unit fell from £5 to 23p. Cost savings bonuses were 15% of the saving, so I reckoned that left me looking at a bonus of about £300,000. What I actually got was 12 bottles of wine, a pen and the undying thanks of the directors that lasted for about 24 hours.

        More galling was that the sales manager got an award for improving profitability and a new company car.

  3. trevorde Silver badge

    Slice of a bigger pie

    One of our friends ran a company and really did pay unlimited commissions. She knew that the more commissions she paid out, the more she was making overall. She used to agonise over how to pay her sales staff *more*. Everyone in the industry was lining up to work for her.

    1. LDS Silver badge

      Re: Slice of a bigger pie

      Yes, that's how company start to be full of salesman while people creating the products leave because they are paid a pittance, product starve, and salesman one day find their customers are no longer happy about what they sell....

      1. Martin Summers

        Re: Slice of a bigger pie

        Sales people have their place, they are after all doing something your average techy person can't do (with a few exceptions). They deserve the commission they get so long as they didn't completely blatantly lie to make the sale, which is sadly quite often what happens.

        The support staff around the product being sold should indeed be compensated well. That however is a different matter entirely, as without the sales in the first place there'd be no compensation for anyone at all. Its quite easy to forget that when you're staring green eyed at the bonus figures and lifestyles sales people seem to have. I've done technical sales, I was on commission and didn't do too badly. I hated it though and went back to a straight salary position as soon as I could.

        1. 2+2=5 Silver badge

          Re: Slice of a bigger pie

          Just an anecdote...

          Years ago, when I was just a developer, we went to give a demo to a potential customer. This was long before the Internet so demos had to be given in person and either they came to you or you went to them, taking your demo kit with you.

          There was a problem setting-up and we needed another hour. I said this to the salesman and he didn't even blink - just took the customer away and kept them busy for an hour. When they came back the demo worked and we got the sale.

          My opinion of that salesman went up rather a lot as a result.

        2. TimMaher Silver badge
          Facepalm

          Re: “blatantly lie”

          That’s what a pre-sales analyst is for.

          To keep the salesperson in check.

        3. LDS Silver badge

          Re: Slice of a bigger pie

          I worked in a company who was treating its salespeople very well, then started to think after all developers weren't so important, as salespeople looked very good at selling their products.

          One of the manager - a salesman itself - clearly explained developers should be regarded as "blue collars" because they didn't do more than putting software products together, the important part was selling it. So they started a company reorganization in that direction. For example, no more bonuses to developers for successful projects delivered in time and with happy customers. Still salespeople got bonuses and benefits.

          Soon all skilled developers left. They replaced them with the only ones who could accept the lower wages and toxic environment. Quality went down the sink. Customers started to sue the company after the sales because the product never really did what the salespeople promised. That company then went bankrupt. Some of the customers asked to old developers to maintain their software but was not always possible (I did for one who kept the IP and bought the source code, and made nice money).

          It is true you need sales to to make the money rolling in, it is also true in a competitive environment you need competitive products, otherwise you have nothing to sell, and often you can deceive a customer only once. Of course if you can offshore most of the work and your customers have little choices it can work....

        4. General Purpose Silver badge

          Re: Slice of a bigger pie

          Indeed, some sales staff are so good, they sell stuff their engineers didn't know existed and have no idea how to produce.

        5. LybsterRoy Bronze badge

          Re: Slice of a bigger pie

          You seem to forget, as most sales people do, that without the lowly minions back at base producing something there would be nothing to sell and hence no commission!

          I know one salesdroid can "support" many people on whatever the shop floor is but that shoun't mean they get paid that many times more.

      2. dinsdale54

        Re: Slice of a bigger pie

        Decent companies stick a large percentage of revenue in to R&D. I think it was ~14% at the last few companies I worked for - most of that is salaries. The senior tech people at my last 3 companies were very well paid - several hundred thousand dollars a year for the experienced people. The money for those salaries has to come from somewhere.

        There's a competitive market for experienced tech people as well. It's a symbiotic relationship.

  4. tip pc Silver badge

    “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. “

    He lands their biggest ever deal and the judge agrees that Veritas set the quota too low.

    I’m not in sales but wouldn’t want to work there if I was.

    Now knowing how much these guys get paid I’ll push them harder for stuff, they should earn their commissions, I’m not doing the work for them anymore.

    1. Edwin

      Renewal?

      I believe it was a renewal, in which case the really tough sell (assuming your delivery is good) has already been done...

      1. LybsterRoy Bronze badge

        Re: Renewal?

        Yup - renewal - part of a team. There should have been NO commission, only a deduction if the customer didn't renew.

  5. Anonymous Coward
    Anonymous Coward

    sometimes...

    There is a difference between what is legal and what is right

    1. Anonymous Coward
      Anonymous Coward

      Re: sometimes...

      and between what is actually in the contract someone signed, and what they think was in it.

  6. AlanSh

    How much?

    Given his base salary and bonus's, I'm not weeping too hard for him

    1. Anonymous Coward
      Anonymous Coward

      Re: How much?

      Once annual income is in the house price range, I also get less empathetic about minor reductions.

  7. WYSIWYG650

    bad move by Veritas

    regardless of how you feel about the pay of salespeople, screwing a top performer is always a bad move for a sales culture. I agree the product/R&D should be the primary investment but to think that a salesperson does not play a strategic role is wrong. They get paid that amount of money for a reason, if it was easy, everyone would do it.

    1. FIA Silver badge

      Re: bad move by Veritas

      Was he a top performer though? To be honest I thought the takehome was he was good, but not as good as he thought he was. (Renewal, not new deal, etc etc)

      Mind you, I wish I was good enough to be pissed off at only being paid double my years salary in one month.

      1. Shalghar Bronze badge

        Re: bad move by Veritas

        I believe we can agree that letting anyone feel cheated will somewhat degrade any kind of relationship.

        There is that case of a promised Toyota in the back of my mind, replaced with a toy Yoda as the employee hit and surpassed the target.(Any search engine of your choice might find it.)

        As way too many people on this planet, i also know how "good" and "motivational" it feels if you are clearly promised X if you deliverY but then suddenly you have to deliver 2 * Y or dont even get 1 / X.

        This does not necessarily mean monetary promises.

        Imagine being promised to go for two week shifts abroad with one week afterwards to recover and prepare for the next two week shift (for a bigger project that lasts around 9 months), then after the first two runs the manager above the manager who gave that promise appears to alter the agreement Darth Vader style to 3 weeks away, one week R&R/preparation. After that you suddenly experience without prior warning that travel days are shifted from monday to sunday for going and from friday to saturday PM for returning. As another nice idea hits the single half braincell of the managers manager, your travel expenses are drastically cut and then vanish without a trace, also without warning.

        If your customers are nice chaps (Yes, Brian, i still remember you. Best wishes to you,Chris, Ian, Sean and David wherever you guys are.) you really try hard not to let your newfound motivation influence your work ethos and quality.

        The long term damage however is not only a reasonable amount of grudge but also the impression that whatever might be promised will vanish into thin air anyway, no matter who promised and who took away.

        Which will quite likely influence future decisions to help the company out again - or..... not.

  8. Henry Wertz 1 Gold badge

    Demotivation

    And Veritas will wonder why their sales people are not motivated to go after the larger contracts. Honestly, claiming a fairly large commission (10% seems high to me) but then finding ways to weasle out of paying it is no way to motivate anybody.

  9. FlamingDeath Silver badge
    Megaphone

    “I like money”

    - Frito

  10. Pascal Monett Silver badge
    Facepalm

    A "safety net" clause

    Here's my definition of safety : you show your gratitude to the people who give you exceptional deals. And that gratitude is manifested in money, because a pat on the back is just an insult these days.

    The bone-headedness of manglement these days defies comprehension. What do you prefer : having a salesman on your team that got half a million bonus, that you can show as living incentive to get the rest off their asses and cracking for the company, or having a lawsuit that clearly demonstrates to the rest of the team that their best efforts will be met with "meh" ?

    Morons.

    I've said it before and I'll say it again : if you don't want to give massive payouts to your sales team, don't make rules that give them massive payouts, only to create secondary rules that cheat them from it.

    In any case, one thing is sure : do not go working for Veritas UK sales team. You're going to be cheated.

    1. FIA Silver badge

      Re: A "safety net" clause

      I've said it before and I'll say it again : if you don't want to give massive payouts to your sales team, don't make rules that give them massive payouts, only to create secondary rules that cheat them from it.

      When did taking responsibility for reading what you've signed stop being a thing again?

      If you're good enough to earn 100K+ a year, and legitamatly expect half a million pound bonuses you should be good enough to understand what you're signing up to?

      The guy's not being made destitute, or having his home taken from him, he's simply only getting over double his yearly salary in one month, rather than over 4x. Because he was involved with negotiating an extension to a pre-existing contract; yet failed to adequatly read his own.

    2. Dave314159ggggdffsdds Silver badge

      Re: A "safety net" clause

      No one was cheated, because the judge threw out the attempt to cheat the company.

      As is quite clear in this case, there was never any entitlement to any commission for anyone at all for this renewal, and certainly not for a sales droid who was only tangentially involved. He was trying it on in the most shameless way, looking for a windfall he hadn't worked for.

  11. TheProf Silver badge
    Devil

    Meanwhile in the boardroom

    'Great job showing up half-a-day every week. Here's your bonus. Yes, mine was inflation busting too.'

    1. DeathSquid

      Re: Meanwhile in the boardroom

      You've obviously never sat on a board. It's a half a day a month, max.

      1. TheProf Silver badge

        Re: Meanwhile in the boardroom

        I was including the Zoom calls from the Caribbean.

        1. John Robson Silver badge

          Re: Meanwhile in the boardroom

          Got to justify those travel expenses...

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