Creating a Global Sales Compensation Framework Balancing Standards with Flexibility

Creating a Global Sales Compensation Framework Balancing Standards with Flexibility Donya Rose Managing Principal, The Cygnal Group, Inc.

How many sales roles are there? Direct Sales Overlay People Managers Small Game Hunters (outside sales) Small Game Hunters (inside sales, outbound call center) Big Game Hunters - Long sales cycle, outside sales Territory Managers (geographically defined) Account Managers (organized by named accounts) Customer Service Reps (inbound call center) Brokers Key or Global Account Managers Product specialists Industry specialists Channel Managers Technical Engineers and other Sales Support Roles Lead Generation/ Appointment Setting roles Administrative Support Staff Sales Managers Sales Executives 2

And how many variants do you need for each role? Number of Roles x Number of Levels Jr/Mid/Sr x Number of market types From emerging to mature x Number of areas of strategic emphasis = Number of comp plans 10 2 2 3 120 3

And how would all those plans vary from one another? Pay level total compensation at target Pay mix % fixed / % variable Leverage over-achievement mechanics Measures and weights Payout mechanics commission, bonus, curve shape Performance ranges threshold, excellence performance levels Measurement period e.g., month, monthly YTD, quarter, annual Crediting and payment triggers at order intake, revenue recognized, cash received, etc. Emphasized sales new customers, strategic customers, new products, strategic products, higher margin sales, longer term length, etc. 4

What are the key process steps? 1. Agree on objectives for the plan across the business 2. Profile the core sales roles 3. Establish a sales compensation framework 4. Interpret the framework into specific plans for each business unit 5

Who should be involved? Steering Committee Business Leader, HR Leader, Finance Leader, Sales Leader Compensation Framework Design Team BU Sales Leaders, Compensation Manager, Sales Controller, Compensation Administrator, IT Project Leader Sponsor the project Set the business goals Approve and support the framework Design the framework Orchestrate the deployment of the framework to the business units - Provide tools for design, modeling and communication - Facilitate BU design process - Ensure consistent application Ensure systems are in place to calculate, report, and monitor plan performance BU1 Design Team BU Sales Leader, BU Sales Managers, BU Finance, Compensation Manager, (BU) Compensation Administrator BU2 Design Team Apply the framework to design all the plans needed by the Business Unit Review model of plan effects (aggregate and incumbent) to confirm design settings Prepare final communication materials from templates provided by Compensation Framework Design team Communicate the plans to eligible employees Use the plans to focus and motivate sales effort 6

Establish design objectives Why are we doing this? A useful set of design objectives answers these questions What types of sales do we need to emphasize? Sales of which products/services To which customers With what deal characteristics Sold how What focus/behaviors do we need to increase, decrease? What should our plans do for us that they aren t doing today? What are our plans doing well that we don t want to lose? As these goals are developed, keep in mind the fact that some business goals aren t really the job of the sales comp plans 7

Establish design objectives Sample objectives #1 Overall objectives Keep it simple Simplify administration Deliver market-competitive pay Compensate consistently across the organization (same role -> same plan) Ensure pay is motivating Clearly link performance to pay (ability to easily know the comp value of a deal) Reward handsomely for over-goal performance Limit pay for under achievement Design for most people achieving quota (at least 50%) Assist in attraction and retention of key talent Support through accurate, timely, and clear reporting Pay for value created Reward for standard/clean deals Enhance the focus on profitability Ensure timely move from order intake to revenue to cash Reward the right focus Collaboration where needed Correct execution of the sales process Activity metrics, values, training, and education Annual quota attainment supported by quarterly consistency Timing New plans announced before the sales meeting 8

Establish design objectives Sample objectives #2 Reinforce the right kind of sales Solutions = more products in each deal Build partnerships with customers High price/margin New account acquisition Retention Avoid complexity Include the ability to calculate payout at a deal level Ensure a consistent approach is applied where sales roles are similar Assist in attracting and retaining key talent Pay for value created Ensure the people creating the most value earn the most money Decreased payout for decreased value (lower commission rates for lower margin) Reward people for involving the right team in each opportunity (not too many, not too few) Reward well for the big win even if it s a one-time win 9

Profile core sales roles Sales compensation is role-based compensation, so The plans should vary when the role varies Start by profiling the core individual contributor selling roles Key accountabilities Nature of the sales process 10

Profile core sales roles Sales Role Definition Dimensions Role Name Sales Cycle Length Relative Prominence Role Name Time from initial contact to completed sales job (may be upon closed sale, revenue recognized, cash collected, etc.) Usually stated in a range of weeks, months, or quarters Degree to which sales results are directly influenced by this one sales person (vs. the team, pricing, features, brand value, etc.) Rate 1 5, with at least one role at, and one at Typical Quota Typical Deal Size Performance Range Key Accountabilities Ideal Incentive Measures If more than one measure is necessary, then provide values for each May need to provide a range and a median value Show values for the acceptable/expected range of performance vs. quota May need different ranges for different measures What are the most important few things people in this role are expected to accomplish This does not include experience, skills, competencies, personal characteristics only expected activities, focus and results These should be directly related to the key accountabilities Ideally, these are under the control of the sales person, have a measureable effect on the company s financial results 11

Profile core sales roles Sales Role Definition Examples Role Name Inside Sales Representative New Business Sales Executive Sales Cycle Length 2 6 weeks 12-18 months Relative Prominence Typical Quota Order Intake: $200k/quarter Order Intake: $2.5M/year Typical Deal Size $5k - $15k (median $8k) $300k - $1.5M (median $500k) Performance Range Order Intake: 80 100-120 Order Intake: 50 100 150 Key Accountabilities Penetrate existing accounts with additional products & services Identify larger opportunities and refer to field sales Prompt & thorough response to inbound calls Meet order intake quota Cultivate relationships at all levels with new/prospect accounts and business partners Lead complex sales cycles, coordinating cross-functional teams Maintain pipeline health (size, velocity) Forecast accurately Maintain high level of customer satisfaction through implementation Ideal Incentive Measures Order intake Order intake Customer Satisfaction 12

Design the framework The dimensions of the framework will likely include Pay level vs. market Pay mix and leverage Incentive measures Performance ranges Incentive form and mechanics Measurement period Sales credit and payment triggers Payout frequency Others based on business needs 13

Design the framework Pay Level Most larger companies have a stated Compensation Philosophy You may need to interpret the compensation philosophy to make it useful for sales compensation Company Compensation Philosophy We offer market-competitive compensation In comp terms: We target 50 th percentile based on survey data. Sales Compensation Philosophy We offer market-competitive total compensation at targeted levels of performance, with top performers earning 1.5 to 2 times target incentive pay level 14

Design the framework Pay mix and leverage Pay Mix reflects the relative amount of pay in the base salary vs. that in the incentive opportunity at target 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Incentive at Target 30,000 Base Midpoint 70,000 Incentive = 30,000/100,000 = 30% Base = 70,000/100,000 = 70% With 70% of the TCC in the base salary and 30% in the incentive, we say that this plan has a 70/30 mix 15

Design the framework Pay mix and leverage Pay Mix reflects the relative amount of pay in the base salary vs. that in the incentive opportunity at target 100,000 90,000 80,000 70,000 60,000 Incentive at Target 30,000 Incentive Varies more than the base, typically from 0 to 200% -300% of target based on current year sales results 50,000 40,000 30,000 20,000 Base Midpoint 70,000 Base Varies within one role or market by +/- 20% from midpoint based on persistent attributes: 10,000 0 Skills Experience Leadership Long term potential 16

Design the framework Pay mix and leverage Role prominence is one of the key factors to consider in determining the appropriate pay mix Lower Prominence Higher Prominence Prominence is...... a measure of the degree to which the customer s decision to buy is influenced by the individual seller... a characteristic of a role (not an incumbent) Prominence is not...... directly aligned with pay level in fact it generally decreases with increasing levels of sales management responsibility 17

Design the framework Pay mix and leverage The right mix correctly balances Motivation against Control Variable Variable Base Variable Base Variable Base 100/0 50/50 75/25 85/15 Motivation to sell +++ ++ + Depends on influences other than compensation Responsiveness to company direction Sales perspective Depends on convincing Sales that the new direction is good for them I m running my own business inside the company. + ++ +++ The base is nice, but I can t live on it I have to make my goals to pay my bills. Making my goal really matters to me, but if I fall a little short I ll be OK and stick around next year could be better. It s great that we have a bonus program, especially when it pays out. 18

Design the framework Pay mix and leverage Leverage refers to the amount of upside earned by those who achieve excellence performance levels 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Leverage 30,000 Incentive at Target 30,000 Base Midpoint 70,000 Leverage = 30,000/100,000 Incentive at Target = 30% = 30,000/100,000 = 30% Base = 70,000/100,000 = 70% The full leverage amount is earned by those in the top 10% of performers The very top performers may earn more than the full leverage amount (if the plan is uncapped) 19

Design the framework Pay mix and leverage The Leverage Factor expresses the relationship between incentive at target and excellence incentive earnings Leverage Factor = Total Incentive at Excellence Incentive at Target 2.0 60,000 30,000 140,000 120,000 100,000 80,000 Leverage $30,000 Incentive at Target $30,000 Total Incentive at Excellence = 30,000 + 30,000 = 60,000 60,000 40,000 20,000 Base Midpoint $70,000 0 20

Design the framework Pay mix and leverage Generally, the higher the percent of pay at risk, the higher the leverage factor 180% Percent of Total Target Compensation 160% 140% 120% 100% 80% 60% 40% 20% 0% Leverage 7.5% Incentive at Target 15% Base Midpoint 85% 15% at risk LF = 1.5 Leverage 25% Incentive at Target 25% Base Midpoint 75% 25% at risk LF = 2.0 Leverage 75% Incentive at Target 50% Base Midpoint 50% 50% at risk LF = 2.5 21

Design the framework Pay mix and leverage Example: Pay structure 200 Annual Compensation at Target (000) 180 160 140 120 100 80 60 40 20 0 Base Midpoint 43k Inside Inbound Rep 85/15 mix LF = 1.5 Leverage 54k Incentive at Target 36k Base Midpoint 54k Territory Manager 60/40 mix LF = 2.5 Leverage 100k Incentive at Target 50k Base Midpoint 50k New Business Manager 50/50 mix LF = 3.0 Leverage 45k Incentive at Target 36k Base Midpoint 84k Sales Manager 70/30 mix LF = 2.25 Leverage 30k Incentive at Target 30k Base Midpoint 120k Sales Director 80/20 mix LF = 2.0 22

Design the framework Pay mix and leverage The framework gives guidance about pay mix and leverage Pay mix ranges by role type Relationship between pay mix and leverage Sample Framework Guidance Re. Pay Mix and Leverage Prominence Mix, Leverage High (most Individual Contributors) Med-High (large deal sellers and Leader 1) Medium (more senior leaders) Med-Low (indirect sales support) 50/50, 3.0 60/40, 2.5 70/30, 2.0 80/20, 1.5 For global frameworks Role prominence must be combined with cultural norms to derive the right pay mix E.g., expect more aggressive pay mix in China, less aggressive in Japan 23

Design the framework Incentive measures Each role should be assigned up to three incentive measures Good measures are... Aligned with key accountabilities of the role and top imperatives for the business Directly influenced by the sales person in the role Track-able based on existing systems Three or fewer in number Measured at the level at which results are generated (individual, small team, division, etc.) 24

Design the framework Incentive measures There are several basic types of measures, appropriate in specific situations Type of Measure Volume Sales Value Profit Market share Use when... Sales people have little to no control over pricing Different products and customers with the same volume have similar value to the company Sales people have little control over pricing Different products and customers deliver similar profitability as a percent of sales Sales people influence profitability via product mix and/or pricing The company is comfortable with sales people knowing at least relative profitability of products Market dynamics affect all providers in the market similarly so that the size of the market is not the direct result of effective selling Market share can be measured reliably and frequently continued on the following page 25

Design the framework Incentive measures There are several basic types of measures, appropriate in specific situations Type of Measure Customer satisfaction Strategic sales objectives Use when... Sales people strongly influence ongoing customer satisfaction Customer satisfaction can be measured reliably and frequently There is general consensus that customer satisfaction directly influences company profitability Other measures in the current fiscal year will not reflect the value created by the sales person (due to startup situation, long sales cycles, etc.) Quantitative and objectively-verifiable measures can be devised for each sales person, though the same measure may not be appropriate for all sales people continued on the following page 26

Design the framework Incentive measures The framework gives guidance about incentive measures Often the core measure is the same across the entire business Additional guidance may be provided about secondary measures, the use of flexible incentive components (MBOs), etc. Role Type New Business Sales Executive Account Manager Sample Framework Guidance Re. Incentive Measures Measures 60%: First year value of new contracts 40%: Out-year value of new contracts 60%: Total in-year revenue 40%: First year value of add-on contracts 27

Design the framework Performance ranges History is your best guide for performance ranges The chart shows performance for each sales person in each BU for the year Each circle represents one person The BU bar shows the median value for that BU The shaded range goes from 5 th percentile to 90 th percentile performance for the whole group From this, a 50% - 150% performance range appears reasonable 28

As the level of aggregation increases, the performance range narrows Design the framework Performance ranges 5 BUs, each with 8 RSMs, each with 10 Sales Executives (results generated based on the normal distribution with a mean of 100% and a standard deviation of 30%) 29

Design the framework Performance ranges The framework gives guidance about performance ranges The guidelines may be stated in terms of goal size, number of individual contributors making up the goal, or organizational level of aggregation Without a narrowing of the performance range, the plan s payout curve mechanics won t work Sample Framework Guidance Re. Performance Ranges Expected quota accuracy Performance Range High Business Unit total Medium Region Low Territory/Account List 85 100-115 75 100-125 50 100-150 30

Design the framework Incentive form and mechanics The form of the incentive is determined by business priorities Commission Incentive Form Mechanics A piece of the action is delivered for selling usually communicated as a percent of revenue or margin sold Quota-based Incentive Form The target incentive for the role is earned for meeting the sales goal set for each individual seller Pay philosophy Appropriate for... Cost of Sales: The sale has an economic value to the company, and we will pay a portion of our profits for successful selling effort Earlier stage companies, or new product/service introductions Equal selling opportunity across all assigned territories Goal setting challenges New account hunting roles Cost of Labor: The sales job has a market value, and we will pay a targeted compensation level for meeting sales goals More mature companies/ markets Strong brands, well-supported sales organizations Significant differences in selling opportunity among sellers Solid goal setting processes Retention/penetration roles 31

Design the framework Incentive form and mechanics Curve shapes send messages Straight line 300% 200% 100% The more you sell, the more you earn Sag below goal 300% 200% 100% Under-goal performance pays relatively little 0% 0% 50% 100% 150% 200% Steps (e.g. at 100% goal) 300% 200% 100% 0% 0% 50% 100% 150% 200% Accelerate > 100% goal 300% 200% 100% 0% 0% 50% 100% 150% 200% Getting to goal really matters but don t screw up your chances for next year Beyond goal is where the real money is 0% 0% 50% 100% 150% 200% Threshold 300% 200% 100% 0% 0% 50% 100% 150% 200% Decelerate > Excellence 300% 200% 100% 0% 0% 50% 100% 150% 200% Performance < 50% of goal is totally unacceptable Over-achievement pays, but not at the highest rate forever 32

Design the framework Incentive form and mechanics The framework gives guidance about incentive form and mechanics Many companies either have only commission plans or only quotabased incentive plans; some include both Curve shape can be standardized across incentive types and performance ranges Sample Framework Guidance Re. Incentive Form and Mechanics Role Type Incentive Form and Mechanics All individual contributors First dollar commission with rates accelerating to and beyond quota Sales leaders (45%TIC at 50%Q, 65%TIC at 75%Q) Quota-based incentive with threshold mirroring excellence (e.g., 125% excellence means 75% threshold) 33

The measurement period must be aligned with the nature of the sales process Independent measurement periods Definition: Each measurement period is independent of all prior periods Examples: Monthly, Quarterly, Annually Appropriate use: Design the framework Measurement period Sales people do not have a great deal of control over the timing of results so that they cannot hold orders for a more favorable upcoming period Compensation plans do not include a great deal of leverage for over-performance so there is no potential advantage in delaying sales Year-to-date measurement Definition: Goals and performance are measured on a year-to-date basis so that by the end of the year the total payout is what it would have been if the measurement period were annual Examples: Monthly YTD, Quarterly YTD, Annually YTD Appropriate use: Seasonal or lumpy businesses in which sales people would like a chance to make up early underperformance and still earn the full year incentive if they can bring in the full year goal by the end of the year Long sales cycles Highly-leveraged plans Sales people have control over timing of results and could hold orders to maximize earnings 34

Design the framework Measurement period The framework gives guidance about incentive form and mechanics Independent measurement periods may be impossible to consider for some companies for whom the year is sacred Consider independent measurement periods when Goal setting for several quarters out is difficult Business changes are imminent Year-end business hockey stick is problematic Sales cycle length Sample Framework Guidance Re. Measurement Period Measurement period > 3 months Annual <= 3 months Independent quarters 35

Design the framework Sales credit and payment triggers Timing of sales credit and payment is based on when the sales job is done Crediting trigger Sales job Order intake Product shipped / service delivered Revenue recognized Cash received Obtain orders for company offerings Book orders that result in delivered value Book orders that result in recognized revenue Sell, ensure fulfillment, and collection Typical in Larger companies with dedicated new business roles, stable processes, robust deal review Long term contract sales Many companies this is the most typical crediting trigger Many companies (same as prior in most cases) For software, more typical of account management roles Earlier stage companies where funding the commission requires the cash Companies selling to markets with collection issues Long term contract sales with a preference for upfront payment 36

Design the framework Sales credit and payment triggers The framework gives guidance about sales credit and payment triggers Generally all sales people in a company are paid monthly, quarterly, or annually with sales leaders perhaps paid less frequently than individual contributors Crediting and payment guidance can provide different triggers for sales credit vs. payment Beware tails. Sample Framework Guidance Re. Sales Credit and Payment Timing Deal Characteristics Preferred deals Profit in keeping with the business model, standard payment terms, clean revenue recognition Minor deviations from preferred Non-standard deals Measure and Timing Sales Credit at OI, Pay after first check received Sales Credit at OI, 50% after first check, 50% after 6 months Margin-based Credit at OI, 33% after first check, 33% after 50% complete, 33% after 50% margin earned 37

Generally, more frequent payouts are better, with a few caveats Design the framework Payout frequency More frequent payouts are generally better because they Maintain focus on key business goals Improve motivation with rewards offered soon after results are delivered Provide information needed for sales management to intervene and provide coaching early Create more opportunities to celebrate successes and reinforce good results Less frequent payouts should be considered when... They are needed to align payouts with business reporting periods for reliable measurement of results Payment at target is small enough that the amount is more meaningful if it is offered less frequently The cost/level of effort to calculate and pay the incentive is high The sales cycle is long (quarters or years) 38

The framework gives guidance about payout frequency Design the framework Payout frequency The measurement period may be longer than the payout frequency e.g., annual plans paid quarterly, independent quarter plans paid monthly Sample Framework Guidance Re. Payout Frequency Measure Type Quota-based incentives Inside Sales Short sales cycles, smaller deal sizes Quota-based incentives Named Account Sales Longer sales cycles, larger deal sizes Payout Frequency Monthly Quarterly Strategic Sales Objectives Semi-annually 39

Design the framework Other dimensions Other dimensions to consider for your sales compensation framework Already discussed Pay level vs. market Pay mix and leverage Incentive measures Performance ranges Incentive form and mechanics Measurement period Sales credit and payment triggers Payout frequency Others to consider Uplift mechanism (to emphasize preferred sales) Appropriate use of flexible incentives (MBOs) Per-deal or per-account caps Component linkages (e.g., no acceleration on secondary component until primary component goal is met) 40

Sample Sales Compensation Framework page 1 of 3 Role Characteristic Plan Design Principle Design Parameters Role Prominence The degree to which the individual sales person can personally influence the comp plan measures As prominence increases, so does % total comp at risk and leverage for overachievement Prominence High (Individual Contributor Sales People on individual quotas) Medium (Leaders, Sales People on Teamed Quotas) Mix Leverage 50/50 to 60/40 2.0 to 2.5 60/40 to 70/30 1.75 to 2.0 Measurement Period The measurement period should mirror the sales cycle length longer for long sales cycle roles, shorter for the rest Nature of Role Highly transactional (Most Inside roles) Consultative / large deals Measurement period Independent quarters Annual Leaders Independent quarters Expected goal setting accuracy If results are highly predictable, performance ranges are narrow; if they are harder to predict, a wider performance range is appropriate Expected goal accuracy High e.g., National total Medium e.g., Region, Teamed Goals Excellence Performance 110% - 115% Lower value for larger quota 115% - 125% Lower value for larger quota Low Territory/Account List 150% 41

Sample Sales Compensation Framework page 2 of 3 Plan Feature Plan Design Principle Design Parameters Primary measure Payment timing Measures should be controllable by the sales person, track-able, and directly linked to value creation Payment should be made when the sales person has achieved a significant milestone made when the value of the deal to the company is known completed at the point at which the sales person should typically disengage and move on to the next sale Sales value of the deal including hardware, software and services for all deal types and all roles Deals Small < $150k Large > $150k Limits on payment for all deal types: Payment Timing 100% paid at Booking 50% paid at Booking 50% paid at 50% of cash collected Deals that are more than 50% of a sales rep s quota will be subject to prior approval and could have adjusted payout vs. the official comp plan formula In case of limited or no involvement of the rep on a specific deal, pay may be adjusted to reflect the contribution of the rep 42

Sample Sales Compensation Framework page 3 of 3 Plan Feature Plan Design Principle Design Parameters Payout form Quota bonus is generally used where company is an established market leader the sales process is complex with multiple role types & overlays Quota-based incentive communicated in value/percentage point of quota achieved Payout curve shape Additional measures Pay at a lower rate for the first few sales with acceleration as quota is approached and exceeded Fewer measures is better, as long as key accountabilities are reflected; 3 is the maximum Two payout rates below quota with lower payout rates for first few deals (50% of quota pays 40% of TIC) Accelerate over quota based on leverage factor and excellence performance level Decelerate over excellence, typically to ½ the highest rate, but always over any below-quota rate Emphasized product for those with an opportunity to sell a strategically important product, a separate quota and incentive component may be included to ensure focus Coaching effectiveness for first level sales leaders, to encourage them to coach each of their people to achieve quota Profitability for those with discount authority, at least 30% of TIC is applied to gross margin dollars vs. goal 43

The Cygnal Group s focus is sales compensation The Cygnal Difference Experienced Consultants at Your Service All Cygnal Group engagements are led by Principals in our firm. Your Engagement Leader will be present for every Design Team meeting, actively involved in developing all recommendations and deliverables, and will serve as your primary contact throughout the project. Proprietary Incentive Design and Modeling Tools Our proprietary plan design and modeling tool enables real-time design during Design Team meetings. The plan model enables the Design Team to keep an eye on the implications of the design for both individual eligible employees and the overall business results as key parameters are set and changed and the plan is tuned. Compared to the traditional PowerPoint-based meeting format, the quality of the design decisions is improved dramatically without sacrificing clear presentation of key concepts and meeting flow. Plan Communication and Implementation Expertise We are specialists in delivering compensation as a management tool. Our capabilities include developing communication strategies, messages and content to ensure your compensation plans create motivation and excitement among your sellers. Continued Support We understand that our clients want sales compensation plans that meet the needs of their business. Our hours, trips and deliverables can be part of making that happen, but they are not our product. All of our design engagements include unlimited access to your Engagement Manager for the first year with your new plans. The Cygnal Group s product is more effective selling by your sales team enabled by better sales compensation plans. THE CYGNAL GROUP Copyright 2012. The Cygnal Group, Inc. All rights reserved. 44

We work with clients of all sizes, private and public, across all industries, bringing solid domain expertise to bear on your unique sales compensation issues Advanced Sensor Technologies Allscripts AMCOL / Asia Minerals, Global Paper Ameri-Co / Carriers, Logistics Allstates America Transport Systems Arysta Life Science Aviat Networks / Harris Stratex Networks Blakeman Transportation CarQuest The Channing Bete Company ChemWare Choptank Transport Comcast / Business Services Consonus Technologies Cott Systems Criterion Brock CRST Logistics Daiichi Sankyo DART Advantage Logistics DealerTrack Delta Systems Dur-A-Flex Elsevier / CDS Group Elster / Solutions ETS / Prometric Flynn Transportation Franklin Street Partners Genomic Solutions GXS HD Supply Ingram Entertainment Integrity Logistics Invensys / Eaton Irving Oil JH Rose Kalsec Kingsgate Transportation Magnet Street Meritech Misys Banking Novartis Animal Health Packsize PDI - Ninth House Roehl Transport Roofing Supply Group Rose Paving Red Hat Software Sensus / Metering Systems Scholastic Publishing SDI / Verispan Solae Sparta Systems Standard & Poor's / Capital IQ SunGard SunTech Medical Taylor Distributing Tellabs Thomson Learning Trinity Transport Unifi Valassis Viewpointe Waste Management THE CYGNAL GROUP Copyright 2012. The Cygnal Group, Inc. All rights reserved. 45

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End Donya Rose Managing Principal The Cygnal Group +1 919-933-2204 donya.rose@cygnalgroup.com We help you make your numbers better cygnalgroup.com THE CYGNAL GROUP