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
**********************
Comments on Salesman compensation on RMR
August 12, 2025
************************
Comments on Salesman compensation on RMR from article on July 28, 2025
************************
Ken
Great topic Ken . There as many comp plans as there are companies . I was part of a franchise network with 98 offices. Our company always has 3-4 reps in the network top 10. Why? 2 reasons. I hired winners and paid them well and made excellent returns for my company. Winners, to me, were many times married people with home ownership; Stable; Re compensation, we paid RMR X 24 months x 20%; 30 x 24 + 720; Plus Install of $500 x 20% = 100. Total $820. Too much? We did carriage trade residential and major account commercial; I wanted pros to represent.
We hired, trained and retained them and profited. Never hire cheap accountants, attorneys or employees. You got what you pay for
This why dealers may need loans to finance growth. We do understand.
Jim Wooster Sr
Alarm Financial Services
415 509 4750
**********************
another comment
**********************
Ken
We pay a bonus, not a Commission. I think bonus is at owners’ discretion and commission is not. I think Commission Corrupts. Salesperson only thinks about themselves instead of the client and company.
We word it “Bonus at owners discretion based on overall work Performance,”
sales guys paid one month of monthly value of Monitoring fee; they calculate and we review, approve and payout monthly. Techs have bonus based on upsells.
When we hire the word commission has never been used.
name withheld
********************
Response
********************
It's common to pay sales people on commission, at least partially; it's viewed as a way to incentivize them to increase productivity. Whatever your commission arrangement it's best to be in writing. In fact, in New York [I don't know about other states] if the commission agreement isn't in writing then in a dispute that makes its way to court only the commissioned sales person is permitted to testify to the terms of the commission arrangement; the employer cannot testify.
The clearer the agreement is worded the easier it will be to administer the commission. The K&K Employment Agreement and the K&K Independent Sales Agreement both have provisions for commission structure, though you have to come up with the commission rate.
What about the "deal" used by Name Withheld? No commission. "We will pay you a bonus based on what we want; no commission".
Let's play devil's advocate. Disgruntle ex-employee shows up in lawyer office and claims he is owed money. Let's really get outrageous: The employee landed the biggest deal of a lifetime, multiple buildings, multiple systems, ten million in installation and $600,000 RMR.
While there is no commission agreement the employee was always paid a bonus, over many years, of 10% of installation and 2 months RMR. This sales person demanded his $1,600,000.00 and when the employer balked, he quit [or you can change the script and say he was fired] and went straight to the lawyer's office.
Facts are agreed to: no commission agreement; long history or bonus based on sales, same calculation every year. You're all the jury ....
The employer may want to take position that he'd rather take his chances than have to pay out that $1.6 million. It might be a good bet unless the penalty for withholding wages [which includes commission] is three times the amount owed plus legal fees, and interest. That $1.6 just jumped to $6,400,000.00. Guess who owns the business now?
*********************
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