KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** More Comment on Salesman compensation August 13, 2025 ************************ More Comment on Salesman compensation from article on July 28 and August 12, 2025 ************************ Ken: We constantly have a battle on the commission as we provide the salesman 10% of the NET profit AS LONG AS THE COMPANY MAKES 20%. On FIRE JOBS – the salesperson HAS to draw up the plans, get them to the A&E for final OK, get them to the AHJ – ALL FOR THAT COMMISSION, which can be several thousand dollars on BIG jobs! Don’t forget the OTHER needed paperwork as the responsible party list, proper alarm permit, open/close information. etc. BUT, that salesman makes well over 100K and sometimes 125K. I don’t discriminate if the salesman ‘bird dogs’ or sells the job from our website as a call in as long as the job IS PROFITABLE. Good salesmen don’t really care as they are not trying to sell on the cheap. I have someone who does and that it's a shame. Like I said, constant battle end of each month when commissions are paid (PAID ONLY IF COLLECTED; NO PROMISES AS WE CAN’T TAKE PROMISES TO THE BANK). THEN, there is paid the 1st 3-months RMR and ONLY the 1st 3-months. The person wondering did not specify if this was ongoing payment percentage of the RMR; if so, that will become DEADLY as I have found the salesman will be collecting so much they will no long have ANY incentive to continue to bring in NEW business (the lifeblood of the company). Those salesmen are now LONG GONE AND GOOD RIDDANCE WHEN THEY SAID THEY WERE JUST GOING TO RIDE IT OUT! MAKE SURE YOU HAVE AN AGREEMENT THAT INCORPORATES A “WHEN YOU LEAVE” CLAUSE – prevents them going to wage and hour to SUE YOU. name withheld ******************* Response ******************* Good points and advice. It's a mistake to give a commissioned sales person a continuing interest in the RMR; you will have created a partner in those accounts. It's common to pay a salesman commission on the sale and installation. Generally it's a percentage of the sale and installation price. Using a "profit" calculation is an invitation to dispute, which is exactly how Name Withhold describes it. Battle each month. Avoid that. The formula and calculation should be on gross price. The "home office" should have to approve the sale or require guidelines be followed if a commission is to be earned, but figured it off gross, not net, unless the net is determined by gross price less easily identifiable expenses, like actual cost of equipment. Some points to consider: percentage of sale and installation and when paid? home many months RMR? is there claw back of commission if the account doesn't pay or cancels within certain time? is it clear that the accounts belong to company? how often are commissions calculated and paid? does salesman need to be working for company to get paid? do all commissions terminate with end of employment? is salesman restricted from dealing with customers during and after employment with company? how and where are disputes handled? Keep in mind that a great salesman can be beneficial to vital and essential for your business. But, even so, the tail shouldn't wag the dog. use the K&K Employment Agreement or K&K Independent Sales Agreement. ******************** STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** WEBINARS: https://www.kirschenbaumesq.com/page/alarm-webinars *********************** ALARM ARTICLES: You can always read our Articles on our website at www.kirschenbaumesq.com/page/alarm-articles updated daily ******************** Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth *********************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* PODCASTS: https://podcasts.apple.com/us/podcast/ken-kirschenbaum-presents/id1794851477 ************************* Getting on our email list / Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
