Retention Bonus

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Performance-Based Compensation

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

    A type of employee stock option with a tax benefit, when you ...
  3. Long-Term Incentive Plan - LTIP

    A reward system designed to improve employees' long-term performance ...
  4. Year-End Bonus

    A reward paid to an employee at the end of the year. Many year-end ...
  5. Back Pay

    The amount of salary and other benefits that an employee claims ...
  6. Contingent Commission

    A commission with a value dependent on an event occurring, and ...
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. Investing

    What are Preference Shares?

    Preference shares, also referred to as preferred shares, are equity shares that give the shareholders certain rights ahead of common shareholders. For instance, when the corporation declares ...
  5. Retirement

    Pages From The Bad CEO Playbook

    Excess compensation, golden parachutes, tunneling and IPO spinning make these bad executives even worse.
  6. Retirement

    5 Lesser-Known Retirement And Benefit Plans

    These plans aren't widely used, but they fill a specific niche for employees in certain situations.
  7. Insurance

    Trending Toward Asset-Based Management

    Will charging fees instead of commission increase your client base?
  8. Investing Basics

    Beware Of Company Stock In Qualified Plans

    While this strategy does have a few advantages, it can also pose some substantial risks to employees.
  9. Retirement

    Job Hunting: Higher Pay Vs. Better Benefits

    Focusing on salary may be a mistake. Find out which benefits have the highest long-run payoff.
  10. Personal Finance

    America's Compensation Gap Shows No Signs Of Slowing

    The gap between the rich and the poor and middle classes is rapidly increasing in America. Historically this is not a good sign, as a strong middle class has been the backbone of the U.S. economy ...

You May Also Like

Hot Definitions
  1. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  2. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  3. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  4. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  5. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  6. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
Trading Center