What is On-Target Earnings (OTE)?
On-Target Earnings (OTE) is the total expected annual compensation when a salesperson hits 100% of their quota, combining base salary plus variable pay (commission and bonus).
What is OTE in sales compensation?
On-Target Earnings (OTE) is the total annual cash compensation a salesperson earns when they hit 100% of their quota. It includes base salary plus variable pay (commissions and bonuses). For VP Sales roles, The CRO Report's data shows the typical OTE is 1.5x-2x base salary, meaning a VP Sales with a $200K base would have an OTE of $300K-$400K.
OTE represents what you should earn if you perform at target. It includes base salary, commission, bonuses, and sometimes accelerators. OTE is the standard way companies communicate total compensation for sales roles.
OTE Components
OTE = Base Salary + Variable Pay at 100% attainment. For VP Sales roles, the typical split is 60-70% base and 30-40% variable. A VP Sales with $250K base and 60/40 split has an OTE of $417K. Some roles also include equity and benefits on top of OTE.
VP Sales OTE Benchmarks
Based on our analysis of current job postings, VP Sales OTE ranges from $300K to $600K+ depending on company stage and location. CRO OTE can exceed $700K-$1M+ at growth-stage and public companies. Equity is increasingly a major component, especially at pre-IPO companies.
Negotiating OTE
When evaluating an OTE offer, ask about quota achievability, accelerators above 100%, and how many reps historically hit target. An OTE of $500K means nothing if the quota is unrealistic and no one has ever achieved 100%. Focus on the guaranteed base and realistic variable earning potential.
Get Weekly Sales Intelligence
Join 500+ sales executives getting compensation data, market trends, and career intelligence.
Subscribe Free