How do you handle grandfathering rules when legacy reps depart?

Question

Pulse RevOps · The Machine · Accepted Answer

## Grandfather Rule Exit Mechanics

**Direct: Grandfather rights are personal, not territorial—when rep exits, rights retire with them. New hire ≠ assume grandfather.**

Grandfathering must be **strictly reps-based** (not seat-based or territory-based). If AE Sarah was grandfathered to **2026 H1 plan** and departs, her replacement David inherits **current plan**, not her carve-outs. **Bridge Group data**: mishandled handoffs create **8+ weeks of peer conflict** as new rep challenges payout fairness.

### Grandfather + Departure Scenarios

- **Rep resigns with pending deal**: Old plan payout applies **if deal closes within 90d**. Beyond 90d = new rep assumes; if new rep didn't contact account, **forfeit = proceeds to manager bonus pool**.
- **Rep terminated for cause**: Grandfather rights **may cease immediately**; depends on legal + intent. Consult counsel before communicating.
- **Rep transferred (internal)**: If moving from Sales to CSM, grandfather **ends on effective transfer date**. Prevents abuse (reps chasing old rates across orgs).
- **Rep promoted (same org)**: Grandfather **continues on legacy cohort rate** until natural expiration. New expanded territory = grandfather applies to old territory only.

### Departure Process

```mermaid
flowchart TD
  A[Rep Departure Announced] --> B{Grandfather Active?}
  B -->|Yes| C[Notify Finance + Rep]
  B -->|No| D[Standard offboard]
  C --> E{Deals in Flight?}
  E -->|Yes - Within 90d| F[Old plan pays out on close]
  E -->|Yes - Beyond 90d| G[New rep + new plan from day 1]
  E -->|No| H[Grandfather expires, seat resets]
  F --> I[Document payout in CRM]
  G --> I
  H --> I
  I --> J[Archive grandfather record]
```

### Governance

| Trigger | Action | Owner |
|---------|--------|-------|
| Resignation + deal pending | Legal review (if $500K+) | GC |
| Termination for cause | CRO decides retention of rights | CRO |
| Internal transfer | Finance vests new territory under new plan | Finance |
| Promotion | Grandfather stays on old base, new territory = new plan | Manager |

**Force Management note**: Reps will test grandfather boundaries; explicit written policy in offer letters prevents disputes. Verbal approvals = **$20K-100K in comp litigation**.

**Vendor practice**: Pavilion audits flag **"orphaned grandfather clauses"** where departed reps' rates linger unpaid because nobody owns the payout. Clean them before they fester.

Key: Grandfather is earned, not transferred. Design terms into offer letters from hire Day 1.

TAGS: grandfather-rules,rep-departure,handoff,comp-governance,attrition,legal-risk

Trigger	Action	Owner
Resignation + deal pending	Legal review (if $500K+)	GC
Termination for cause	CRO decides retention of rights	CRO
Internal transfer	Finance vests new territory under new plan	Finance
Promotion	Grandfather stays on old base, new territory = new plan	Manager

How do you handle grandfathering rules when legacy reps depart?

Grandfather Rule Exit Mechanics

Grandfather + Departure Scenarios

Departure Process

Governance

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