Update: 'The company is going to lose $8M': Boss dismisses financial officer's advice and pays the price

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Brad Dickson • Managing Editor
Sep 23, 2023 9:00 AM EDT

Some business leaders prioritize sales above all else, offering hefty incentives to their sales teams for acquiring new clients at unserviceable rates. These leaders and their cronies will then cash out once the numbers have been sufficiently plumped up like a stuffed pig with an apple in its mouth.

The nightmare begins when it comes time to service these contracts. Inevitably, slowly, the organization will begin losing money but, by then, those responsible will already have their bonuses in hand for a "job well done." And before anyone figures out why (or how) in the heck the ship is headed directly towards the rocks, those responsible will have jumped—long gone, on their way to their next grift. Those remaining will be scrambling, attempting to put the ship back on course, but stuck with a boatload of contracts that are springing leaks in the company's financial viability.

It's not uncommon for those who seek to speak reason to their bosses to be faced with derision instead of thanks, but when you're specifically employing someone to tell you what you shouldn't be doing, you should probably listen to them.

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  • 01
    Gas - Waffe 40 SOUDLY AL32730338
    via Jp Valery
  • 02
    Font - Posted by u/infinitiumvortex 5 4 39 Director said process contracts faster and don't fuss over details, Okay you'll lose bonus Initially had this story in r/maliciouscompliance but came across this sub-reddit through comments. I work with a federal contractor responsible to buy or bundle hardware, software, etc any govt organization needs and review the contract in terms of financial viability and legal clauses. In other words, ensure we make money and we are legally covered. The contract
    via u/infinitiumvortex
  • 03
    Font - LAST YEAR Our company went through a re-organization i.e. fire people and give more work to people still left with the company while paying us peanuts. We are small company with less than 200 employees and trying to retain our government customers while big companies like amazon cloud will replace us in less than 10 years. The government customers love working with us because this is the only thing we do and treat the customers better than big contractors who don't care. They laid off 30
    via u/infinitiumvortex
  • 04
    Font - I have a habit of reviewing everything carefully and spending hours on each contract even one that just makes us a few thousand dollars. Govt vendor selection process is slow and they are VERY risk- averse so a lot of customers start at a few thousand dollars and end up in an 8 or 9 figure contract if everything goes well. Since people were laid off I was struggling with the work volume and as a result, contracts were piling up. The sales director i.e. different team did not like me as I
    via u/infinitiumvortex
  • 05
    Font - Example - Sales wanted a school district to buy outdated dell windows laptops while entire state was moving towards new cheaper chromebooks. Schools don't have budget and whatever they buy stays for 5+ years. Sales were offloading expensive useless stuff to get better bonuses and also charge customer nearly a million dollars to provide "IT support" for faults arising from ancient hardware. During my conversation with the school district I shared examples of state governments in the north
    via u/infinitiumvortex
  • 06
    Font - The sales director got pad as I was working on small contracts at a slow pace and reprimanded me in front of our manager. The manager did not care and did not defend me and asked: "why don't you follow what the sales director says and stop fussing over small contracts". I said small contracts turn into big ones hence I should pay attention to them as well. Mistakes in small contracts could harm us if the contract becomes big. I am struggling at work because you gave me the job of 3 or 4 p
    via u/infinitiumvortex
  • 07
    Font - I asked the sales director to send an email with a list of "suggestions" to improve my work. He rudely complied and said "Can you not even remember what I just said in the meeting" His email said "Do not review contracts less than $100K and "trust" sales team that due diligence has been done". I replied by copying my manager in the email that This could create liability in the future and want him to confirm again that the sales team will do financial and legal compliance themselves for th
    via u/infinitiumvortex
  • 08
    Font - Cue Malicious Compliance Instead of 2 hours, I spent 10 minutes on small contracts, and voila backlog cleared and I am home by 6-30 PM. Now, a contract worth 10K comes through I found some issues with this contract since it said that we offer 30% rebates to our software providers. This was something we stopped doing 5 years ago and now we just offer software providers a 5 to 10% rebate on contracts. Also, I knew the government client recently got a massive budget and was on a spending spr
    via u/infinitiumvortex
  • 09
    Font - As I mentioned government contracts are slow, no one cared/raised the 30% rebate issue since it was just a $10k customer. 10 months later the state government customer said they want to work with us and get at least the same terms or better terms for a new $50M contract. This was the largest contract in our company's history. The sales director happily gave him a handshake deal that we will offer the same or better terms. Government can legally just buy more on their current contract so t
    via u/infinitiumvortex
  • 10
    Font - The sales team was giddy that they will get million- dollar bonuses. I don't get a sales bonus to ensure I protect customers and the company. The finance team finishes their review and said the company is going to lose $8M and not make any money. Everyone is shocked, the sales director gave a deal without checking with us and we cannot go back on something we offer. Changing contract terms is frowned upon by the government and they have legal contracts stating "NOTHING WILL CHANGE". We ar
    via u/infinitiumvortex
  • 11
    Font - The sales leader had to explain to his team why they won't get bonuses on this big contract they spent over 3 months. Finally legal and finance meet and share their findings we lost money due to the 30% rebate clause. The sales director goes crazy and blamed me in front of everyone and asked me to pack my stuff in front of 30 people. Follows by saying I am terrible at my job despite 100% customer satisfaction.
    via u/infinitiumvortex
  • 12
    Font - I calmly opened my laptop and connected the display cable and opened Outlook while displaying his email on 3 big TV screens stating that I should stop reviewing small contracts. While all 30 people read the email with a faint smile I await the sales director's reaction. He goes into rage mode claiming I misunderstood his email and am terrible at my job. Then I scroll down where he ignored my warning regarding potential liability to the company and his response explicitly asked me to ignor
    via u/infinitiumvortex
  • 13
    Font - Aftermath: I was told to spend 2-3 hours on each contract and the company eventually figured out that it is cheaper for them to hire 20 people like me and pay us $70K every year than to take big losses on their contracts. Our team has 40 members now, still less than 50 but enough to offset the contract volume. Because of the losses sales director had to pay back his previous year's bonus as he had a clawback clause with the company i.e. if you screw up you need to pay us. The sales direct
    via u/infinitiumvortex
  • 14
    Font - PRESENT-DAY He then sued our company for wrongful termination and we just heard today that he lost the case and now owes us another 200k legal fee. Now he owes over half a million to our company. TL;DR, Company fired people and the sales director abuses me when I cannot do the job of 3 people. He ignored my warning that mistakes in small contracts could cause millions in losses to the company. He ended up causing the company millions in losses and gets fired from his job, tried to sue the
    via u/infinitiumvortex
  • 15
    Font - UPDATE 1: A lot of people may ask why am I STILL doing this job which pays less than state wages and I might be able to make more in other companies. I help government customers buy good stuff from many hardware and software companies so they don't overpay or rely on one big company. I feel proud when I can save tax dollars and help customers.
    via u/infinitiumvortex
  • 16
    Font - During covid, a lot of state governments went remote i.e. local meetings on zoom and keeping the government running while working from home. There was a budget freeze due to covid, the economy shutting down, and since covid relief bill was months away. This was a time when the sales team had helpless government customers willing to sign anything just to get remote hardware, and software. I saw this as extortion and despite being an introvert who lacks "initiative" to get promoted I was ab
    via u/infinitiumvortex
  • 17
    Font - I legally cannot disclose the exact government entity by name but can vaguely say that some entities in the state government of New York and the state government of Florida were both using this trial program during the 1st wave of covid. I might change jobs soon since we got a 3% salary hike in the current market while the company has nearly doubled its revenue in a few years.
    via u/infinitiumvortex
  • 18
    Font - UPDATE 2: I just remembered another story that made sales leaders hate me even more. This is during the covid wave when we all were working from home and I was getting used to Zoom. We had a telecom contract with a state government during covid and everyone joined a zoom call to discuss the contract. The sales team was increasing this customer's telecom bills from $60K a month to $300K a month.
    via u/infinitiumvortex
  • 19
    Font - I objected that increased calls during covid are not high enough to justify such a big price hike and we should increase the bill to $100K a month this was enough to cover the cost and even improve profit margin %. But the sales team started laughing and saying if the customer can pay more and is ready to pay more why am I being so vocal. Leadership asked me to shut my mouth and proceeded with a $300K contract. So I started working on other stuff and minimized the Zoom app.
    via u/infinitiumvortex
  • 20
    Font - I don't end zoom calls myself as the meeting admin ends it. Everyone said "bye, nice meeting you all" and I naively assumed the call ended. I vented my frustration by saying these salespeople are like wolves when the country is going through s times. A co-worker sent a chat message a few minutes later that everyone heard what I just said. No one complained or confronted me but this offended them. Also wanted to add all sales team members are not like this. Almost all the new sales reps ar
    via u/infinitiumvortex
  • 21
    Font - chrispmorgan I appreciate your professional pride; society depends on people like you doing the right thing even when the incentives aren't there. Keep it up and you can live with a clean conscience and know you have helped people you have never met. I appreciate that the sales function is necessary but most orgs build in incentive structures that are corrosive to doing the right thing and often end up rewarding luck and deception. 852 Reply Share ...
    via u/infinitiumvortex
  • 22
    Font - Arrasor Sales function isn't the problem. It's the pay structure for sales. 80% of salemans income are bonus and your promotion also depend on how big your numbers are, ofcourse it encourages getting sales by all means. And ofcourse those who use questionable means will land bigger numbers than those who don't. Then when promotion time comes those with bigger numbers ofcourse would get promoted over others. And now the s who use questionable means become bosses. Don't need an expert to se
    via u/infinitiumvortex
  • 23
    Font - infinitiumvortex OP True, I get paid a flat 72k a year irrespective of the state of the business. The sales team has a much lower base salary, not sure but heard it is less than 40k but they get very healthy bonuses. Bonus is highest for new customers and lower for repeat business. However, some salespeople treat it as a transaction and shove things without understanding the customer. Newer startups or software companies have the most bonus and businesses coming from new customers. Howeve
    via u/infinitiumvortex
  • 24
    Font - TurtleSandwicho The salesman promises something that doesn't exist. The development team builds the thing off of vague promises. Customer checks to make sure the thing is delivered, and then never uses it again. Sales team gets huge commission. Layoffs for the development team. You company sounds similar to mine. Reply Share 238
    via u/infinitiumvortex
  • 25
    Font - jonrock I'll say it again: Revenge while staying pro is the best content of this sub. I'll take this absolute CYA triumph over standard vandalism/arson fantasies any day. 184 Reply Share Bobinho4 I agree. The only arson was the sales director setting on fire half million 46 Reply Share
    via u/infinitiumvortex

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