Good question.
From my point of view, I see it like this:
If someone is converting badly and we give him a signup so he sends more traffic, we're throwing away money.
If his small traffic wont convert, why would more of it start converting ????
The better thing to do is try and find out how he's sending traffic and see what can be done with your site, maybe new front-ends for example, so help IMPROVE his conversion.
True, I suppose a sponsor could add sales to someone to keep them happy, but if it's only for reputation, they might as well just pay them straight out to be a rep on the board...same effect, less work
