Software Sales Account Executive OTE Guide: SMB, Mid-Market, Enterprise, Strategic
Understanding OTE in Software Sales
OTE — On-Target Earnings — is the foundation of software sales compensation. It's what you'll make if you hit 100% of quota. It's the number recruiters lead with, the number you negotiate from, and the number that determines your financial trajectory.
But OTE varies dramatically by segment. An SMB Account Executive might have an OTE of $80,000, while a Strategic Account Executive might have an OTE of $300,000+. The difference isn't just the number — it's the quota, the complexity, the risk, and the opportunity.
Here's a comprehensive breakdown of Account Executive OTE by segment, based on data from RepVue and industry sources.
SMB Account Executive OTE
SMB Account Executives sell to small and medium-sized businesses. These are typically shorter sales cycles, lower deal values, and higher volume.
Typical OTE Range: $70,000 - $120,000
Base Salary: $40,000 - $70,000 (typically 50% of OTE)
Commission: $30,000 - $60,000 (typically 50% of OTE)
Quota: $400,000 - $1,200,000 annually
Quota-to-OTE Ratio: 4:1 to 10:1 (meaning quota is 4-10x OTE)
Deal Size: $5,000 - $50,000 ACV (Annual Contract Value)
Sales Cycle: 30-90 days
What to Expect: High volume, fast-paced, transactional selling. You'll close many deals, but each deal is smaller. The focus is on velocity and volume, not complex enterprise deals.
Who It's For: Entry-level AEs, people who want to learn quickly, those who prefer high activity over complex deals.
Mid-Market Account Executive OTE
Mid-Market Account Executives sell to mid-sized companies. These are longer sales cycles, higher deal values, and more complex sales processes.
Typical OTE Range: $120,000 - $180,000
Base Salary: $60,000 - $90,000 (typically 50% of OTE)
Commission: $60,000 - $90,000 (typically 50% of OTE)
Quota: $600,000 - $1,800,000 annually
Quota-to-OTE Ratio: 5:1 to 10:1
Deal Size: $50,000 - $150,000 ACV
Sales Cycle: 60-180 days
What to Expect: Balanced mix of volume and complexity. You'll close fewer deals than SMB, but each deal is larger. The focus is on building relationships and navigating more complex buying processes.
Who It's For: AEs with 1-3 years of experience, those who want a balance of volume and complexity, people ready for more strategic selling.
Enterprise Account Executive OTE
Enterprise Account Executives sell to large companies. These are long sales cycles, high deal values, and complex enterprise sales processes.
Typical OTE Range: $180,000 - $300,000
Base Salary: $90,000 - $150,000 (typically 50% of OTE)
Commission: $90,000 - $150,000 (typically 50% of OTE)
Quota: $1,200,000 - $3,000,000 annually
Quota-to-OTE Ratio: 6:1 to 10:1
Deal Size: $150,000 - $500,000+ ACV
Sales Cycle: 6-18 months
What to Expect: Complex, strategic selling. You'll close fewer deals, but each deal is significant. The focus is on building relationships with executives, navigating complex buying processes, and closing large deals.
Who It's For: Experienced AEs (3+ years), those who excel at strategic selling, people who want to work on high-stakes deals.
Strategic Account Executive OTE
Strategic Account Executives sell to the largest companies. These are the longest sales cycles, highest deal values, and most complex enterprise sales processes.
Typical OTE Range: $250,000 - $400,000+
Base Salary: $125,000 - $200,000 (typically 50% of OTE)
Commission: $125,000 - $200,000+ (typically 50% of OTE)
Quota: $2,000,000 - $5,000,000+ annually
Quota-to-OTE Ratio: 8:1 to 12:1
Deal Size: $500,000 - $2,000,000+ ACV
Sales Cycle: 12-24+ months
What to Expect: The most complex, strategic selling. You'll work on the largest deals with the biggest companies. The focus is on executive relationships, complex buying processes, and multi-year deals.
Who It's For: Senior AEs (5+ years), those who excel at enterprise selling, people who want to work on the biggest deals.
Understanding Quota-to-OTE Ratio
The quota-to-OTE ratio tells you how much revenue you need to generate to earn your OTE. It's a key metric for understanding compensation structure.
Lower ratio (4:1 to 6:1): More achievable quota, lower risk, but potentially lower upside. Common in SMB and some mid-market roles.
Higher ratio (8:1 to 12:1): More challenging quota, higher risk, but potentially higher upside. Common in enterprise and strategic roles.
What it means: If your OTE is $150,000 and your quota is $1,200,000, your ratio is 8:1. You need to generate $8 in revenue to earn $1 in OTE.
Why it matters: Higher ratios mean you need to close larger deals or more deals to hit quota. Lower ratios mean you can hit quota with smaller deals or fewer deals.
Factors That Affect OTE
Several factors affect OTE:
Company stage: Early-stage companies might offer higher OTE but more risk. Later-stage companies might offer lower OTE but more stability.
Product complexity: Complex products typically command higher OTE because they require more skill to sell.
Market: High-growth markets (like AI, security, cloud) typically offer higher OTE than mature markets.
Location: San Francisco, New York, and other high-cost areas typically offer higher OTE than lower-cost areas.
Experience: More experienced AEs command higher OTE than entry-level AEs.
Performance: Top performers can earn significantly more than OTE through accelerators and over-performance.
Base vs Commission Split
Most Account Executive roles have a 50/50 base-to-commission split, meaning base salary is 50% of OTE and commission is 50% of OTE.
50/50 split: Most common. Provides balance between security (base) and upside (commission).
60/40 split: More base, less commission. Lower risk, lower upside. Common in enterprise roles with longer sales cycles.
40/60 split: Less base, more commission. Higher risk, higher upside. Common in SMB roles with shorter sales cycles.
Why it matters: Higher base provides more security but less upside. Higher commission provides more upside but more risk. Choose based on your risk tolerance and financial situation.
Accelerators and Over-Performance
Most companies offer accelerators for over-performance:
Accelerators: Commission rates increase when you exceed quota. Common accelerators are 1.5x or 2x commission rate at 150% of quota.
Uncapped: Some companies offer uncapped commission, meaning you can earn unlimited commission if you exceed quota.
Capped: Other companies cap commission at a certain percentage of quota (e.g., 200% of quota).
Why it matters: Accelerators can significantly increase your earnings if you exceed quota. Top performers can earn 2-3x OTE or more with accelerators.
What to Negotiate
When negotiating OTE, focus on:
Base salary: Higher base provides more security, especially important if you have financial obligations.
OTE: Higher OTE means higher potential earnings, but make sure the quota is achievable.
Quota: Lower quota relative to OTE means easier to hit quota, but might mean lower OTE overall.
Accelerators: Better accelerators mean more upside if you exceed quota.
Equity: Early-stage companies might offer equity in lieu of higher OTE.
Benefits: Health insurance, 401(k) match, and other benefits can significantly impact total compensation.
The Bottom Line
Account Executive OTE varies dramatically by segment:
- SMB: $70,000 - $120,000 OTE, 4:1 to 10:1 quota ratio
- Mid-Market: $120,000 - $180,000 OTE, 5:1 to 10:1 quota ratio
- Enterprise: $180,000 - $300,000 OTE, 6:1 to 10:1 quota ratio
- Strategic: $250,000 - $400,000+ OTE, 8:1 to 12:1 quota ratio
The quota-to-OTE ratio tells you how much revenue you need to generate to earn your OTE. Higher ratios mean more challenging quotas but potentially higher upside.
Choose the segment that matches your experience, risk tolerance, and financial goals. And remember: OTE is what you'll make at 100% of quota. Top performers can earn significantly more with accelerators and over-performance.
Disclaimer: This content is for informational purposes only and does not constitute financial, tax, or legal advice. OTE ranges and compensation structures vary by company, location, and individual circumstances. Data is based on industry sources including RepVue and may not reflect all companies or markets. You should consult with recruiters, compensation professionals, or financial advisors before making any compensation-related decisions. Individual circumstances vary, and this information may not be suitable for your specific situation.