Retention Bonus

A retention bonus is a cash award paid to encourage an employee to remain with a company through a specified date or event. Unlike a short-term incentive, it isn't tied to performance results. It's tied to staying. Companies commonly use retention bonuses around transactions, restructurings, and leadership transitions, or to address a specific retention risk. Some are paid in a lump sum at the end of the retention period; others are paid partly or fully up front, subject to repayment if the employee leaves early (a clawback provision).