What is OTE?
OTE is a core concept in modern B2B revenue. Here is a clear, accurate definition, why it matters, and how Ardovo handles it.
Short answer
OTE, or on-target earnings, is the total compensation a salesperson earns if they hit exactly 100 percent of quota. It combines base salary and target commission or bonus, for example a 60,000 dollar base plus 60,000 dollar target variable for a 120,000 dollar OTE. OTE sets clear expectations for pay at plan.
Key takeaways
- Total pay at exactly 100 percent of quota.
- Combines base salary and target variable pay.
- Often split around 50/50 base to variable in sales.
- Sets clear expectations for on-plan earnings.
Why it matters
OTE aligns rep expectations and company cost. It tells a rep what to expect for hitting target and lets leadership model sales compensation against the revenue those reps produce.
How Ardovo handles it
Ardovo can tie attainment to comp plans so reps and managers see progress toward OTE in real time, and Rook can answer where a rep stands against plan without waiting for a spreadsheet reconciliation.
Frequently asked questions
What is a typical OTE split?
Many sales roles use a 50/50 split between base salary and target variable pay, though it ranges from 60/40 to 70/30 depending on role and deal complexity. More transactional roles often carry more variable.
Does OTE cap a rep's earnings?
No. OTE is earnings at 100 percent of quota. Reps who exceed quota typically earn above OTE, often with accelerators that pay a higher rate on over-quota performance.