Most companies that put a ceiling on sales pay do it for reasons that sound sensible: predictable costs, fairness across the team, no awkward month where a rep takes home more than the boss. The problem is what that ceiling does to the one person you can least afford to lose. A sales commission cap tells your best performer exactly where their growth inside your company ends, and the most capable people take that message seriously.
That was the argument Dimitar Petrov, a salesperson with more than twenty years in direct sales, made on the Hills of Business podcast in conversation with host Dimitar Dimitrov. His view is blunt, and it is aimed at owners rather than reps.
“Most companies put a cap on pay, and in the long run that dooms them to bankruptcy.”
(Dimitar Petrov, translated from Bulgarian)
“Bankruptcy” is a strong word, and it reflects one practitioner’s experience rather than a study. But the reasoning behind it is worth following step by step, because it explains a pattern many owners only notice after the damage is done.
How a top seller reads a company
Petrov described how he evaluates a company before committing his time to it. He looks for the most successful person there, which is usually easy because their name is on a board or they have won an award. Then he finds a way to talk to them and asks directly what sits behind first place, including how much money.
He was open about why. Everyone works for money, he said, and a professional seller needs to know what the time invested in a company will return. In his estimate, most people are interested in the same thing but are uncomfortable saying so. If he sees that one person has earned an attractive amount, and then that several others have too, he takes it as a sign the company genuinely pays well.
This matters for owners because it shows how strong salespeople think. They are not just reading the job description. They are reading the ceiling. A company where the top earners have clearly been held back sends a signal before the first interview is over.
Why owners cap commission in the first place
According to Petrov, the trigger is usually emotional, not financial. When a seller reaches certain thresholds, those numbers start to create jealousy in the manager, the director or the owner. He pointed out that there have been situations where a professional salesperson earns more than the owner in a given month, as long as there is no cap on what they can earn.
For many owners, that is uncomfortable to watch. So the cap arrives, often framed as a structural decision: aligning sales pay with other senior roles, smoothing out payroll, keeping things “fair.” Petrov’s example was a seller whose bonuses get cut until they are paid like a high-level bank employee.
The flaw in that reasoning is simple. Commission is not a cost that grows on its own. It grows because revenue grows. If a rep on commission earns more, the business behind them has, by definition, brought in more. Capping the reward does not cap the cost. It caps the incentive to produce the revenue.
Customers are loyal to the person, not the logo
The most important part of Petrov’s argument is about relationships. Over a cycle of one to five years, a successful seller learns everything about the product and builds relationships with every client they serve. Those clients, he said, are loyal to the salesperson, not so much to the company.
Owners often underestimate this. On paper, the client belongs to the business. The contract has the company name on it, the invoices come from the company account. In practice, the client calls one person when something goes wrong, trusts one person’s recommendation and remembers one person’s name. That trust took years to build, and it moves with the human being who built it.
Petrov described the situation from the seller’s side. Imagine someone who brings in twenty or thirty per cent of the company’s revenue, or more if they have built a team. Then their percentages and bonuses are cut. A dilemma appears: why keep working inside a system that limits them, when they could leave, alone or with their team, start their own company and expect the clients to follow? In that scenario, as he put it, they could earn many times what the owner is allowing them now.
The capped commission does not save money in that case. It creates a competitor who already knows the product, the pricing and the customers.
The call centre problem: when the cap arrives mid-month
Dimitrov added an example from his own early career in call centres, which he described as the fastest training school he could find. The bonus structure worked against itself. By around the fifteenth of the month, a strong performer would already have hit the highest bonus available. After that point, there was no reason to push harder.
Worse, continuing to work could actively hurt. Performance was tracked as a percentage of calls and a percentage of closed deals, so additional effort in the second half of the month could only spoil the statistics. The rational choice was to coast. Dimitrov called it a complete paradox: for half the month, instead of producing more for the company and for themselves, the best people had a reason to slow down, and both sides lost.
This is the quieter cost of a sales commission cap. It does not only drive people away eventually. It changes behaviour every single month. Deals get pushed into the next period. Effort drops once the ceiling is reached. The company pays for a top performer and receives a part-time one.
Why managers keep doing it
Dimitrov offered two possible explanations. One is that the people setting the rules have never been on the other side. They did not start as sellers, so they do not feel what a cap does to motivation. The other is the jealousy Petrov had already described. Either way, the structure tends to persist because the people who suffer from it are not the ones designing it.
The alternative: make the seller a partner
Petrov’s answer to the dilemma was not simply “remove the cap.” It went further.
“The smartest thing is for the company owner to offer the salesperson a partnership.”
(Dimitar Petrov, translated from Bulgarian)
His reasoning: by making the seller a partner in the company, the owner secures a much longer horizon of working together and much more serious income for both sides. The seller stops weighing whether to leave, because leaving would mean walking away from something they own.
Partnership is a large step and not right for every business or every rep. But the logic behind it is useful even for owners who never go that far. The question it raises is: what does this person need to see to keep building here instead of somewhere else? A ceiling answers that question badly. A stake, a growing share or simply an uncapped upside answers it well.
Owners who are happy to be out-earned
The most direct statement in this part of the conversation came from the host, describing how he runs his own team:
“If our salespeople make more money than us, great.”
(Dimitar Dimitrov, translated from Bulgarian)
Petrov’s reply completed the thought: if they earn more than you, it means you also earn more than you would if they were not working for you.
Dimitrov said that because he had been on the seller’s side himself, there is no cap in his company. He described what he tells his team instead: tell me what you need. Promotional videos, a new phone, whatever it is. How can I make your life easier? He was clear that this mindset has to be internally understood before an owner can genuinely run a business that way.
That is the shift in perspective worth taking from this conversation. A capped plan treats a top seller’s income as a threat to be contained. An uncapped plan, or a partnership, treats it as evidence the business is working.
What to check in your own pay plan
If you run a small company with even one person selling for you, a few questions are worth asking honestly:
- Is there a point in the month or year where extra effort stops paying? If so, expect your best people to find it and stop there.
- Who do your key clients call? If the answer is one salesperson, those relationships are an asset that can walk out of the door.
- Why does the cap exist? If the honest answer is discomfort with someone earning a lot, that is a feeling, not a business case.
- What would a competitor offer your best seller? If your plan cannot match an uncapped offer or the option of going independent, you are relying on loyalty you are not paying for.
- Have you considered a stake? For a seller who already carries a large share of revenue, partnership may cost less than replacing them.
The cap protects the wrong thing
A sales commission cap is meant to protect the company from paying too much. In the scenario Petrov and Dimitrov describe, it protects the owner’s comfort instead, and the company pays for that in reduced effort, delayed deals and, eventually, a departure that takes clients with it.
Strong sellers check the ceiling before they commit. Clients follow the people they trust. And a person who has been told how far they can grow will, sooner or later, go somewhere they can grow further. The owners who keep their best people tend to be the ones who are glad to see them earn more.
Source
Episode 4: What top salespeople do differently — Dimitar Dimitrov in conversation with salesperson Dimitar Petrov on the Hills of Business podcast. The conversation is in Bulgarian; the quotes in this article are translated.
