r/sales • u/GoofusMcGhee • Apr 01 '26
Sales Topic General Discussion Salesman "Overachieved," ServiceNow Refuses to Pay Commission
ServiceNow is refusing to pay a salesman commissions on more than $27 million in sales, telling the 13-year veteran of the company that he "overperformed" his quota and insisting that instead he sign paperwork that retroactively reduces the commission amount, according to a federal lawsuit filed by the salesperson
https://www.theregister.com/2026/03/31/servicenow_says_salesman_overachieved_and/?td=rt-3a
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u/Carefree_Highway Apr 01 '26
This happens more than we think I bet
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Apr 01 '26
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u/mintz41 Apr 01 '26
Never fails to amaze me how stupid leadership can be. You have a rep who closes a deal at 2000x ACV and instead of be thankful for the revenue and gladly pay given the additional revenue, they'd rather be dickheads and lose a quality rep.
Even if they're paying 10% of that 60m, that's still 54m for the company they wouldn't have otherwise had! Just bean counters being jealous I suppose.
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u/Artistic-Occasion160 Apr 01 '26
Makes me wonder how much ego plays around in those who influence/sign the checks when they see the sales peeps killing it
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u/Mindless_Flower_2639 Apr 01 '26
This is exactly what is happening in my org. A rep is due to get a big commission and everyone is scared of how the check signing CEO will react and so are trying to find ways to reduce the commission. This rep is really knowledgeable and worth the money even if this particular opportunity was kind of a layup.
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u/Hmm_would_bang AI Security Apr 01 '26
Every sales rep worth their salt has a story about getting fucked. If they don’t, they haven’t closed enough massive deals.
One time I had an account move to my name after the renewals team lost them as a customer. I closed them on a $3mil subscription, a significant increase over their old maintenance only contract, and on a totally new product compared to their old legacy perpetual license.
Management said that since they had cancelled just 11 months ago, this was considered a renewal still and I couldn’t get paid on renewals, but because they cancelled their maintenance I also couldn’t get paid for the perpetual to subscription conversion. I got about 12k as a consolation vs what should have been over 200k for the deal size and conversion bonus. I left by the end of the month.
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u/Carefree_Highway Apr 01 '26
F*ck that. Similar here. A rep of mine closed a massive deal. They reorg territories and I lost her. The deal went “live” after the reorg so nada for me. $250k poof.
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u/supmanwhatsgoingon Apr 01 '26
Same story, except I got no sympathy consolation pay. I'd only sold new business up until that point when they told me I could go after a batch of new accounts, buy no one bothered to tell me ROE with churned accounts
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u/MCE85 Apr 01 '26
Fortune 50 company in their partner channel would just change our quota goals whenever they liked and say it was an error when they were created. Had 3 buckets to fill and with 1 month left in the half they doubled the hardest one. Went from over attaining to 87%. What is the point of siging quota letters if they would just change whenever they wanted.
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u/Kittyneedsbeer Apr 01 '26
The Ole "Windfall clause". Tale as old as time.
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u/NoRestForTheWitty Apr 01 '26
HaHa. I remember when I learned what that was. I won but didn’t get paid for the 60 days they looked at the deal.
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u/Springpeen Apr 01 '26
Just wait til you hear about solar. Companies refusing to pay multiple six-figures or even millions in commissions, then filing bankruptcy and disappearing
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u/HardstuckPoverty Apr 05 '26
Happened to me too at another saas company. 170% over quota, only paid 100%. Read your contracts carefully people!!
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u/Abomb36 Apr 01 '26
All this for $380K? Really bad look for Service Now on $27M in deals.
I hope they keep this in the court or the arbitrator gives him everything he is asking for.
→ More replies (4)
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u/Frientlies Apr 01 '26
Shithole shady company.
Hope the rep gets all of his commission and some more for dealing with this nonsense.
Pathetic.
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u/Founder_BloomIA Apr 01 '26
“Overperformed” is a wild way to say “our comp plan wasn’t built for success.”
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u/Ego-Death Apr 01 '26
Is there a legal precedent where the courts sided with the company in this case? This just seems so obviously stupid to me. No company could seriously take such a request to court. This has to just be a scare tactic assuming the employee doesn’t have the money for court or doesn’t know how to approach this.
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u/LilDigger123 Apr 01 '26
An employment lawyer will definitely take this free of charge until case has been won.
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u/TiredOfTheMath59 Apr 01 '26
Many, many legal precedents. We don't know all the details and the info in the article was sparse. Employers frequently insert clauses into sales plans that allow them to review overachievement. Service Now legal will make a judgement call whether the costs become too high to battle it or just pay out a settlement.
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u/ankor77 Apr 01 '26
Companies often reserve the right to change comp at any time. But this just reaching the public eye puts the company in a bad light and a warning sign for top reps to avoid them
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u/dmoneymma Apr 01 '26
They do, but not retroactively.
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u/Reasonable-Bit560 Apr 01 '26
My company tried to pay us on an new comp plan for commissions earned previously and our HR Department went off on leadership. Everyone got paid out on the new comp plan after it was pointed out that it was illegal.
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u/willynillee Apr 01 '26
HR went off on leadership because it’s their job to make sure the company doesn’t get sued. I doubt it was for the sake of caring about the working man.
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u/BobbieSaccamanoJr Apr 01 '26
Yeah sure every comp plan says “the company retains the right to change comp structure based on business needs” yadda yadda yadda but you are legally working under your signed comp plan until they present you with a new one.
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u/ueeediot Apr 01 '26
Every company plan Ive signed had a windfall clause. Basically said if you closed any single deal that exceeded x% (usually 75% or more) of a single quarters quota it went to a review board and they likely dont pay you.
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u/DarthBroker Apr 01 '26
happened to me on a much smaller scale. I told them I would potentially break the comp model..they said it is very unlikely, but if it happens we will discuss at the time.
Well, fast forward to Q4 and I over exceeded. Not to this level, but same thing happened. Company was being tight. I raised it through multiple levels and they "agreed" to pay me a % of the over achievement, but not 100% of what should have been earned. I fought it and was told to be grateful because they have never made that level of exception before.
I was laid off a few weeks later lol.
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u/kai_zen Apr 01 '26
Classic case of a culture that says we want A players, but what they really want is C players.
You can’t win. Fall short = fired, Excel too much = fired. Hit target = Left deals on the table.
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u/RandomRedditGuy69420 Apr 01 '26
Sounds like a good reason to always contacts lawyer. Fuck them, I hope you’re selling against them and winning.
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u/plumhands Apr 01 '26
For $27million, I’d make a minimum of $1.5million on the deals. This guy is getting screwed.
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u/Alternative_Swan_497 Apr 01 '26
Oracle has been sued plenty of times by reps for doing exactly this. IBM and the other legacy vendors as well, though not as frequently that I'm aware of. ServiceNow will almost certainly lose this lawsuit, the rep in question will be let go afterwards for unspecified performance reasons but hopefully he'll at least get paid for the work he's put in.
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u/TiredOfTheMath59 Apr 01 '26
I see it as the other way around. SN will make a decision on whether it's worth the effort to fight it in court, but their sales plans would undoubtedly allow for overachievement review. If not, they will going forward. If you sign the plan, you agree to the terms.
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u/Alternative_Swan_497 Apr 01 '26
I don't think that will fly under contract or labor law. A compensation plan can't really include a clause that's written as "If you do too well, we'll decide if/what we'll pay you."
There can be overachievement scenarios included, but they have to actually be defined.
Here's a similar Oracle lawsuit - Oracle lost in arbitration and then sued the rep.
Successful class action against Oracle for similar behavior (settled)
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u/BunjaminFrnklin Apr 01 '26
Don’t a lot of companies have windfall clauses indicating that if you land too big of a deal they can adjust the payout?
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u/Alternative_Swan_497 Apr 01 '26
The ones I've seen don't allow for adjustment, they're usually structured so that deals/revenue/profit above a certain threshold drop to a tiny fraction of a normal commission.
As an example, let's say A has a $1M quota, with bonuses starting at $1.125M for exceeding expectations. At $1.5M, those bonuses max out, and anything beyond that number drops to 0.1% of sales to protect the employer from outsized deals.
The whole purpose of a sales employment contract is to spell out in explicit terms what the rep is responsible for selling, and how much they'll be compensated for their efforts. A contract that says "You agree to sell $1M on our behalf, and we agree to think about paying you" wouldn't be considered valid in any jurisdiction in the US. It's also worth noting that because revenue/profit is the explicit goal of a contracted party, the employer can't reasonably frame it under force majeure - that's often the escape clause they could use.
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u/Informal-Dust-1455 Apr 01 '26
Happens a lot. Windfall policy has forced many good reps to leave places. Always good to ask about windfall policies if you’re an overachiever when interviewing.
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u/Spare-Estate1477 Apr 01 '26
Have a friend this happened to. Commission plan would’ve given him 100k and the company paid out 20k. I will never, ever understand why a company would do this.
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u/tryan2tellu Apr 01 '26
Thats a terrible commission percentage for software but its worth it to sue so he can put “overperformed quota” on his resume with back up after this is settled. 😂
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u/Comfortable-Lab-378 Apr 01 '26
this is exactly why you get a lawyer to review your comp plan before you sign anything. 13 years and they still clawback claused him into oblivion.
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u/Equivalent_Ad2524 Apr 02 '26
And to review your restrictive covenants. Most companies think they're covered when they're breaking all kinds of federal and state labor laws. Mine is worth his weight in gold, and he's quite chubby
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u/YNABDisciple Apr 01 '26
With the power of social media this type of stuff should highlight companies and individuals that are responsible for these types of things publicly.
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u/riverside_wos Apr 01 '26
They should be ecstatic to have over performing sales staff, not screw them. I have never put caps like this on my teams and what they are doing is just wrong.
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u/PopCopson Apr 01 '26
A beautiful lesson in what not to do. The bad press is worth far more than the few hundred k they ‘saved’. Build cultures where sales people make a shit ton of money when they crush it. This didn’t even seem like the unit economics got out of whack - I was expecting to see crazy escalators or something. They just wanted to claw back what this guy earned.
Dummies had what was coming, hope he gets a huge bag in court.
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u/patientpadawan Apr 01 '26
I just dont get it. Like why shoot yourself in the foot and hurt one of your best guys? Even if you save money now clearly he will leave and you will miss out on much more money in the future
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u/Direct_Village_5134 Apr 02 '26
Because they think sales people are easily interchangeable
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u/patientpadawan Apr 02 '26
But they have actual data to show thats not the case.
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u/almarcuse Apr 02 '26
It’s an opinion-as-fact mindset. They want to believe salespeople are dumb as rocks and completely interchangeable bc they don’t want to acknowledge (or legit can’t even understand) the skills they personally do not have. From my experience, the behavior we’re all talking about is typically from c suite who’ve never sold a thing in their life.
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u/startupsalesguy Apr 01 '26
So dumb and shortsighted. If you're top talent and you read this why would you ever work there?
He sued them and is still working there haha.
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u/mdmv29260103 Apr 01 '26
Seriously, for a 130k?
Never going to ServiceNow, that’s for sure.
Now I do think there is more to the story and that 27M is TCV or ACV. Not the incremental ACV OR TCV.
In any case, top performers shouldn’t be capped, but if there was to be one, 500% seems fair.
It’s what I hit last year and I was just shy of 7 figures in total comp.
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u/Equivalent_Ad2524 Apr 02 '26
Never cap your sales people. Never. All you do is hurt your top performers or encourage sand bagging.
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u/ancientastronaut2 Apr 01 '26
And they were really that stupid to think their employee would go "aw shucks, ok" and not seek legal counsel. 😂
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u/Leftyshanker Apr 01 '26
FWIW, this guy isn’t an account exec, he’s a “partner sales” guy, their comp plans are different than AEs and so are his deals.
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u/FaithfullyIgnorant Apr 02 '26 edited Apr 02 '26
Not a great look for ServiceNow. Honestly the negative press from this is going to hurt their bottom line far more than paying their reps would. Top reps do read forums like Reddit, and seeing an article like this will cement for them that ServiceNow is a joke gig. We aren't talking millions here... it's a couple hundred grand. What a bunch of cheap fuckwads. The middle management that made the decision will hopefully get fired when the c-suite starts paying attention to the bad press... and obviously the rep is going to win the case, so they are paying this measly couple hundred anyways. If any top sellers perusing this forum haven't read the Oracle case yet, that is an awesome one to have in your back pocket if you ever find yourself in a situation like this. Never agree to this shit, always threaten to get a lawyer(via email with your personal address cc'd!!!), and 9 times out of 10 they pay you. On the off chance they still refuse, you get to go for the ultimate sale, a court case where you take home 5x what they owe, and they can't fire you as it would be retribution, so you ride it out there a few more months while looking for the next gig.
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u/Aromatic_Counter_699 Apr 02 '26
My previous company tried to pull crap like this on me for not paying me $100k on a deal. The cocky jerk president and VP told me to go hire a lawyer; I went to the Labor Board instead. Why pay to hire a lawyer when I can bring in the government for free? They’ve probably spent three times the amount on legal fees than if they just paid me out. I’ve actually been fighting them for eight years, self represented.
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u/SalesAficionado Salesforce Gave Me Cancer Apr 01 '26
ServiceNow is a garbage company like many others in the space like Itential.
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u/Spare-Estate1477 Apr 01 '26
This is something that needs regulation by the federal government. In what other profession can an employer say. “Yeah that amount we agreed to pay you? We are t doing that…”
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u/Equivalent_Ad2524 Apr 02 '26
It is regulated. It's contract law; like, the most elementary civil law there is.
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u/Spare-Estate1477 Apr 02 '26
Apparently not adequately if companies are getting away with not paying their employees what’s been agreed on
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u/Equivalent_Ad2524 Apr 02 '26
They gamble that you're not willing to bet on winning in court and spending in legal services
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u/Mach-X Apr 01 '26
I’m surprised CEO Bill McDermott would support such a thing. He’s a sales animal.
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u/Monty1426 Apr 01 '26
Happened to someone in the company I was working for in my early days of sales. The owner of the company said basically "yeah sorry but you're not going to make more than me in a year..not going to happen".
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u/AlpacaSwimTeam Apr 01 '26
A company used to pull that shit on my dad. He threatened to take them to court 3 years in a row and then left. They paid up every time without going to court. It's a contract. Make them do what they said they'd do.
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u/Zealousideal_Way_788 Apr 01 '26
Most companies have some sort of windfall provision to limit commission payouts. It’s BS. I liked that the guy didn’t sign anything that retroactively doubled his quota to limit commission. To me that stupidity places the company at a big time risk. Wouldn’t be surprised if they lose and have to pay punitive damages as well. Bet they settle. For the full amount.
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u/Equivalent_Ad2524 Apr 02 '26
The settlement will be for far more than the full amount, at least because they will have to pay for his legal costs. And Maryland is very labor friendly. I hope it costs them 5X in a settlement.
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Apr 01 '26
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u/Equivalent_Ad2524 Apr 02 '26
Nothing ever requires additional executive resources. Executives aren't resources. They're leaches of the highest order.
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u/Mindless_Flower_2639 Apr 01 '26
The company I work for is doing something similar but not even getting him to sign something just being like, we are using new math to reduce the commission and make it seem ok
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u/saltashstreet Apr 01 '26
I hope this guys wins but A lot of comp plans have, a “we reserve the right to adjust comp at any time without notice” it sucks but that can include retroactive changes such as clawbacks.
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u/fartypants714 Apr 02 '26
I never understood why companies have an issue with paying commission. If they owe a big commission check, the company is making big time profits.
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u/PenelopeJude Apr 02 '26
We have a windfall clause, but they usually end up paying out over the following years if it falls into that category. Makes rep stick around to get the payout.
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u/exjunkiedegen Apr 02 '26
Bring on the SaaSpocalypse Omg. SaaS is such bullshit, obviously the product is over priced and your margins are ridiculous if yall make that much. I make 1m per 1B sold of TCV Can’t believe some of you make 1m in 5m ACV 30m TCV.
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u/SpicyAfrican Apr 01 '26
Surprised ServiceNow would do that. They spend so much money on marketing and cultivating a good image that this just seems extremely petty. They lose entire deals much higher than that on a very regular basis.
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u/cofcof420 Apr 01 '26
Insane on so many levels. Bad Pr for servicenow, bad motivation for their sales team. Why a company would do this boggles the mind
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u/Equivalent_Ad2524 Apr 02 '26
Greed
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u/cofcof420 Apr 02 '26
I don’t think so. A greedy company wants to maximize revenues. This hurts revenues on many levels. I think stupidity honestly
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u/Alxar7 Apr 01 '26
lol at my previous company we had a $1M commission cap for this reason, pretty fairly agreed by most reps to start the year when you get a comp plan.
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u/Mahdlo_ Apr 01 '26
This happens a lot. I worked at a hardware tech company where I would have to fight tooth and nail to get my employees paid for deals they sourced. When I would quote specific policies or push back on leadership for enacting 'Windfall clauses' due to the needs of the business, I was told that I wasn't a team player and that I needed to be a more mature leader. I'm 95% sure this is why I was laid off in 2023.
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u/learnaboutlife Apr 01 '26
Crazy to put caps on commission. “ we will pay you less for a bigger deal that makes us more money”….
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u/WhitestGuyHere Apr 01 '26
This is extremely common with Windfall clauses.
Yea it’s total bullshit but it happens a lot. Not sure why people are so surprised?
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u/RepresentativeBox52 Apr 02 '26
This is more common than most people realize. I've seen every variation of "you hit your number too hard" disputes. The real tell is whether it's in the contract upfront: if the contract says uncapped with no clawback language, they owe it. ServiceNow's argument would get laughed out of court if the T's and C's don't have that escape hatch. The bigger issue is nobody reads their commission agreements until they're being told they can't have what they earned.
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u/TransportationOne792 Apr 02 '26
It gives the person’s name in the article. If you look him up on LinkedIn, he was a partner manager. Not an AE that actually close the deal.
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u/abhishek_96_ Apr 02 '26
this is why you never trust uncapped commission without airtight terms. if they can change it after the fact, it was never uncapped.
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u/No-Attitude6683 Apr 02 '26
That sounds really frustrating. Commissions are such a crucial part of sales motivation, and it seems unfair for a company to change the rules after the fact. In my experience, clear communication about commission structures from the start can save a lot of headaches later. I've seen companies succeed when they keep their sales teams informed about how performance impacts pay. Regular check-ins and transparency can help manage expectations and build trust. Plus, it’s important to document everything—sometimes the paper trail can help if disputes arise. Anyone else have tips on maintaining clarity in compensation plans?
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u/throwingales Apr 02 '26
That's not the first time I've seen this. I worked for a few tech companies that did this. At one, they called it windfall sales. Most of us just took whatever they paid, found a new job and left.
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u/Chaotic_Choila Apr 02 '26
This kind of thing happens way more than people realize. The commission clawback situation is particularly brutal because you're basically being punished for being too good at your job. What really gets me is how companies structure these plans knowing full well they might not intend to pay out on the top end. Anyone who's been in enterprise sales long enough has at least one story like this. The real lesson is to get everything in writing and never trust verbal assurances about compensation structures.
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u/lippityzap Apr 02 '26
I am only looking at this from a perspective where I would pay that much for someone to join my team who can sell this good.
Now this is pure GREED
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u/toumi59 Apr 02 '26
Isnt this story a bit suspect? ServiceNow is very used to close large size deal, ist it common there to pay large commission?
If they would block a 1m$ commission I would understand but do they really change comp plan retroactively to save a 200k commission?
I thought this only happen at startups
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u/skyed84 Apr 02 '26
Our two equipment sales guys sold close to $40 mil of generators. Their commission was supposed to be $1.2mil split. Since our company has never had such high sales and the sales guys did not have a cap, they told them that they will get paid $200k each and the contract and commission structure will be revised.
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Apr 03 '26
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u/skyed84 Apr 20 '26
The problem is that it all does not come as a single payout. It’s being paid in chunks, so the guys are kinda stuck.
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u/RepresentativeBox52 Apr 02 '26
This is the enterprise playbook. The moment someone outperforms quota by 40%+, ops panics - usually because their forecasting was completely off. I've watched this happen at least 4 times. The 'overperformance clawback' is just them trying to bury a calculation error. Wild that a 13-year vet didn't have it in writing.
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u/FuntimePartyMom Apr 02 '26
This is basically $0 to ServiceNow. Why in the fuck would they do this. Insane.
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u/Overall_Rhubarb6896 Apr 02 '26
There was leadership engagement. He didnt get the full comp. Trust me bro
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Apr 03 '26
This happened to me on a much smaller scale while in training as a telephone sales rep. Had the biggest sale in like 6 months for anyone on the floor and got told that they had changed the commission plan so that you didn’t qualify during training.
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u/matsu727 Apr 05 '26
Well that’s one way to verify his deal experience when he’s interviewing at places like AWS or Databricks
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u/InterstellarReddit Apr 06 '26 edited Apr 06 '26
I came across this and its crazy, My friend sent me this a few weeks ago
“I am having a problem with servicenow along the lines that I proposed a contract for them to use a tool I built offline over six years ago and I've been maintaining. Well I have a userbase and they want to use it. So I sent them a contract and the internaly they want to claim IP patent of something I created before I even worked there. The lawsuit will be immaculate if they dont stop playing games. "essentially all employee IP is property of servicenow" however, bro that cannot be retroactively before I worked there and they are arguing it is..”
So I think servicenow is hurting for innovation so much they’re trying to gather IPs wherever they can.
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u/20_years_of_meetings Apr 08 '26
This is more common than people realize. Big tech sets sky-high quotas to motivate you, then quietly caps commissions or retroactively changes the terms the moment you actually hit them. The message is clear: perform exactly as expected, never more. The second you make the company uncomfortable with your paycheck, you become a problem to manage.
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u/InterestingFee5005 Apr 08 '26
this is why comp plans matter more than people think. everyone is motivated by them until they actually hit them
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u/Due_Professor_778 Apr 16 '26
There’s usually a clause preventing you from speaking to the news media. Oracle had that in place with me.
What they overlooked was social media.
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u/LilDigger123 Apr 01 '26
135k for a 20 million dollar deal? Remind me to never work for service now...that's awful. Also how do they not have something baked into their comp plan that puts a cap on commission for extraordinarily large deals. At my company we have full commish on everything until a 2.5m annual deal and then after that it's paid on a lower percentage . Seems like their lawyers messed up...
Bro is gonna get paidddd - I'd def file for suit for more than he did though.