Retention Bonus
What is a Retention Bonus? How It Works and When Companies Use It
A retention bonus is a one-time payment to incentivise an employee to stay during a critical business phase: M&A transitions, leadership changes, restructuring, or when a key employee receives a competing offer.
Retention bonuses usually come with a clawback clause: leave before the retention period ends and you repay some or all of the bonus. A typical structure might be full repayment within 12 months, 50% repayment within 24 months.
The key distinction from regular bonuses: retention bonuses are about staying, not performing. They're paid regardless of performance, purely for commitment to remain.