Community / Sales Glossary
Compensation

Clawback

A Clawback is a provision in a sales compensation plan that requires a rep to return previously paid commissions if a customer cancels or churns within a defined window — typically 90 to 180 days after close. Clawbacks align rep incentives with customer retention rather than just deal signing, and they reduce the risk of reps closing deals that are poorly qualified or unlikely to stick. They are most common in markets with high early churn risk or low switching costs.

Related Terms
CommissionChurn RateOTE (On-Target Earnings)CSM (Customer Success Manager)
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