At small fast-growing companies, where so much rides on key salespeople, it's important to set up a compensation strategy that helps achieve long-term sales goals. We asked three 1995 Inc. 500 CEOs how they do it.

Glenn Edwards of medical supplier National Patient Care Systems, in South Hackensack, N.J., pays his sales manager a $70,000 base salary, reasoning that "it should be 70% of what his income needs are, so he isn't too comfortable." To emphasize growth, Edwards gives him .1% of gross revenues up to the previous year's revenues and .2% of sales that exceed the prior year's number.

Shane Jones of Ace Personnel, in Overland Park, Kans., admits that his sales manager's $40,000 base salary is below the industry average but says, "I ask employees to take some risk." The rewards for risk include annual profit sharing, of which the manager will get about $3,500 this year, and a monthly commission consisting of .5% of new revenues or 1% to 3% on sales the manager makes herself (based on meeting profitability goals). She's also eligible for a $4,500 quarterly bonus pool that is divvied up by the 15 employees at the $7.3-million staffing service.

Shiraz Balolia of Woodstock International wouldn't reveal his manager's base pay but claims that it's a little above average for the Bellingham, Wash., area. In addition, the $4.2-million manufacturer of woodworking accessories will pay the manager a bonus if the company makes the Inc. 500 again. Balolia estimates that with $7.5 million in 1996 revenues, his manager will earn an additional 25% to 30% over his base salary.

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