ServiceNow allegedly says salesman 'overachieved' and is not entitled to comp
The 13-year sales vet closed two deals worth $27 million, but ServiceNow has “nullified” his compensation saying he “overachieved” his quota.
ServiceNow is refusing to pay a salesman commissions on more than $27 million in sales, telling the 13-year veteran of the company that he "overperformed" his quota and insisting that instead he sign paperwork that retroactively reduces the commission amount, according to a federal lawsuit filed by the salesperson. ServiceNow has denied all his claims.
Jorge Costa, who is still employed by ServiceNow as the public sector sales leader in Washington, D.C., is demanding a jury trial and payment of $761,974, double the $380,987 in commissions he says he is owed for closing two massive federal contracts: one in 2024 and another in 2025, according to the suit [PDF] filed last month in U.S. District Court in Maryland.
In its own filing [PDF], ServiceNow has denied all of Costa's claims. It wants a federal judge to move the legal fight out of the courts and to arbitration, citing Costa's 2012 employment agreement.
ServiceNow did not reply to an email from The Register seeking comment. A lawyer for ServiceNow told The Register that she could not immediately discuss the suit. Neither Costa nor his lawyers replied to The Register.
Costa writes in the complaint that, for the first 12 years of his job, ServiceNow consistently paid his commissions, but all that changed in September 2024 when he closed a $7.3 million deal with a federal customer.
"(Costa's) then-manager told (him) that (ServiceNow) would not pay this commission because the Sales Compensation Department had concluded that (Costa) had 'overachieved to a degree that was outside normal' in relation to his sales quota. In other words, (ServiceNow) believed (Costa) had made too much money," the suit states. "Notwithstanding that (Costa's) commission was only a small percentage of the revenue recognized and received by (ServiceNow)."
Rather than pay the $236,845 that Costa was owed on that deal, Costa says his supervisor asked him to sign paperwork that would retroactively raise his quota to a higher dollar figure, which would eliminate many of the incentives that had fattened the commission he would otherwise be entitled.
Costa refused.
In August 2025, Costa again closed a massive federal deal, this time for $20 million, which under the terms of his compensation plan for 2025 would have entitled him to $144,142 and he was again told the commission was too large, the lawsuit states.
The sales operations manager placed a hold on his payment telling Costa's supervisor via email that he had "overperformed" and should sign a retroactive deal that doubled his target in order to reduce the amount of the commission.
Costa refused to sign the paperwork both times and, as a result, ServiceNow has now "nullified" his commissions for those deals, according to the filing.
"The 2024 Plan and 2025 Plan both provide 'that earned commissions shall not be adversely affected retroactively.'" Costa's lawsuit states. "Despite this, (ServiceNow) retroactively nullified (Costa's) two commissions after he had earned them."
Costa said that, to calculate the value of the commissions, the deals were entered in Varicent, which he said is the internal system that ServiceNow uses to tally how much its salespeople are owed on the deals they close.
The amount that is calculated is paid at the end of the month, Costa says, which had always been the case until he “overachieved.”
“(ServiceNow) promised to pay (Costa) commissions earned on the September 24, 2024 and August 15, 2025 sales by (i) issuing (ServiceNow’s) 2024 and 2025 Sales Compensation Plans; (ii) approving the commissions; and (iii) entering the commission amounts into Varicent,” Costa’s lawsuit states.
Varicent has written about its work tracking and streamlining ServiceNow’s sales commission process, and ServiceNow’s vice president of global sales compensation Rick Butler provided the company with a video testimonial.
“The team has done a great job of making sure that it is flexible for our needs. Making sure it has the ability to handle what we might need in the future. Plus, the services and support that we’ve gotten from Varicent have been exceptional,” Butler stated in the video.
The parties are awaiting a ruling on whether the case must move to arbitration or will continue in court. ®