Question

What is a retention bonus?

Answer 1

A retention bonus is a payment or reward outside of an employee's regular salary that is offered as anincentive to keep a key employee on the job during a particularly crucial business cycle, such as a merger or acquisition, or during a crucial production period.

Answer 2

A retention bonus is a form of financial incentive to keep an employee at a company. They are generally given during stressful times at an organization such as an acquisition or merger. They may also be given when it is indicated that an important employee is considering leaving. Business owners may offer a significant bonus in order to keep key players. These bonuses are singular transactions in order for an employer to express his or her appreciation for all that the employee has done. Retention bonuses are typically given as opposed to salary raises because during an acquisition or merger, the company may not have the necessary finances in place to commit to a permanent raise.