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 ****************************** Salesman compensation on RMR July 28, 2025 ********************* Salesman compensation on RMR ********************* Ken We specializes in video surveillance, access control, and burglar alarm systems only; we do not handle fire alarms. Considering our salespeople will potentially be responsible for preparing estimates, I'm wondering if it would be appropriate to adjust their compensation. Would you recommend an increase in their base salary or commission structure to reflect this added responsibility? Additionally, I'm currently paying our salesperson a 5% commission on all recurring customer fees. I'd be interested in your opinion on whether this is a standard or effective practice within our industry. Thanks again for your guidance. name withheld ********************* Response ********************* I have to defer to others in the industry for custom practice for paying sales people. I think most sales people are responsible for pricing a job. Whether you want to add a new title of "estimator" to their title of "sales person" is up to you. You do have to be careful structuring a commission based on recurring revenue. For one thing you don't mention if the commission is calculated and paid when the customer signs up, makes first payment or continues over the life of the contract on the recurring revenue. You need to deal with default if the commission is paid on sign up. If over the payments then you need to be careful providing for when the sales person leaves employment, when the account is sold, and when the account goes into renewal or has price increases. I did some quick math. On a 36 month contract at $30 a month the total to be collected is $1080, and 5% of that is $54. Over 60 months its $1800 and 5% is $90. If the commission structure is 2 months RMR the commission would be $60. Your relationship with your sales person, and every employee [but especially those on commission] must be in writing. Use the K&K Employment Agreement. I assume that most sales people are paid on commission, at least in some part. Anyone care to share their experience. ********************** 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
