Retention Bonus


DEFINITION of 'Retention Bonus'

A payment or reward outside of an employee's regular salary that is offered as an incentive to keep a key employee on the job during a particularly crucial business cycle, like a merger or acquisition, or during a crucial production period. In recent years, retention bonuses have become increasingly popular as corporate poaching has increased.

BREAKING DOWN 'Retention Bonus'

With the corporate landscape changing almost daily and a liquid labor market allowing workers to move from job to job more easily, retention bonuses have provided a great way for companies to keep valuable employees. Many believe that such methods add value to the business as well, as they reflect well on company's management and promote loyalty on both sides.

  1. Long-Term Incentive Plan - LTIP

    A reward system designed to improve employees' long-term performance ...
  2. Performance-Based Compensation

    An incentive-based form of compensation that is reserved for ...
  3. Incentive Stock Option - ISO

    A type of employee stock option with a tax benefit, when you ...
  4. Year-End Bonus

    A reward paid to an employee at the end of the year. Many year-end ...
  5. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
  6. Sticky Wage Theory

    An economic hypothesis theorizing that pay of employees tends ...
Related Articles
  1. Professionals

    6 Employment Perks And How To Get Them

    Find out how to get more than money from your employer.
  2. Retirement

    How Unemployment Affects You (Even If You're Working)

    Rebounding from a stint of unemployment can be a frustrating thing to do. These tips should soften the blow.
  3. Personal Finance

    Employee Benefits: How To Know What To Choose

    Starting a new job is stressful but you don't need to sweat about setting up a benefits package.
  4. Retirement

    How Much Can You Contribute to Your 401(k)?

    Given the fairly high compensation limits on these retirement plans, most workers can pitch in more than they currently do.
  5. Personal Finance

    Salary Secrets: What Is Considered a Big Raise?

    A 4% or 5% annual jump in pay may not sound huge, but in today’s environment, it actually means you’re faring better than most.
  6. Personal Finance

    How to Job Search While You're Still Employed

    The best time to look for a new job is when you already have one.
  7. Personal Finance

    How To Get That Entry-Level Financial Analyst Job

    Landing a job as a financial analyst takes study, strategy and a lot of hard work. Here's how to hone your competitive edge.
  8. Savings

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  9. Taxes

    Top Tips for Minimizing Taxes on Severance Pay

    A look at the top ways to lessen the tax burden on severance pay.
  10. Professionals

    8 Justifications For Sky-high CEO Salaries

    Why are CEO salaries so astronomically high? There may be more to the story than you think.
  1. What are some ways employers can reduce employee turn over?

    Employers can reduce employee turnover through the use of certain hiring practices, management methods, compensation, benefits ... Read Full Answer >>
  2. Does my employer's matching contribution count towards the maximum I can contribute ...

    Contributions to 401(k) plans come from employee salary deferral and employer match dollars. According to the IRS, employees ... Read Full Answer >>
  3. How is marginal propensity to save calculated?

    Marginal propensity to save is used in Keynesian macroeconomics to quantify the relationship between changes in income and ... Read Full Answer >>
  4. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>
  5. How does the always be closing (ABC) strategy benefit a salesperson's sales funnel?

    It is good practice in sales to always be closing, because it's common for a salesperson's sales funnel to be leaky. When ... Read Full Answer >>
  6. How reliable or accurate is marginal analysis?

    Marginal analysis is designed to show how economic reasoning allows actors to accomplish more by understanding limits on ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!