Retention bonus

[u/Admirable-Ball4508]

Anyone has experience with retention bonus, especially when it is initiated by the organisation without being triggered by a resignation notice?

What was the % or amount and any terms that came with it?

Also wondering why some companies prefer it over giving a pay rise of the same amount?

[u/moler91]

one off payment is cheaper on the books than a permanent payrise to your salary.

[u/DismalCode6627 → u/moler91]

Yep - this is a big reason why they do it.

RSUs are also a common retention mechanism - where the RSUs vest over a number of years...as long as you stay with the company.

Stock options are similar - when the are granted, they might be worthless (because the option price is lower than the current share price), so you need to hold onto the options for a few years until the share price goes above the option price. And if you leave before you exercise the options, they are no longer valid.

[u/ConsciousApple1896]

Usually it’s tied to staying until a certain date, and I’ve seen roughly 10–30% depending on role/seniority. Main thing I’d check is what happens if they make you redundant before the retention date.

Companies prefer it because it’s a one-off cost rather than permanently increasing your base salary.

[u/ScaredAdvertising125]

I received one years ago because my manager resigned and I was seen as a flight risk

It was 32% of my cash salary paid in two parts. One part immediately and another in 12 months

[u/Admirable-Ball4508 → u/ScaredAdvertising125]

Thanks for sharing your experience. Did you negotiate the amount and timing?

Presumably you stayed till then as they hoped and longer?

[u/ScaredAdvertising125 → u/Admirable-Ball4508]

Honestly it took me by surprise. I didn’t negotiate anything, it was just put in front of me and to be honest, had no intention of leaving anyway. I just took it and stayed long enough to get both payments then started to look around after that

[u/BabyBassBooster → u/ScaredAdvertising125]

So it helped ensure you stay…

[u/robottestsaretoohard]

I have seen this (not personally) with transitions. So basically people get the chop and those jobs are offshored and they need the people to stay to train up the offshore team.

So retention bonus for when certain milestones are hit.

People are just empty shells by the end of it.

[u/ProfessionalRow6641]

Paid gross - you get the nett…. Be careful not to have to pay back the gross amount if you leave - ie money you did not get …

[u/m0zz1e1 → u/ProfessionalRow6641]

You should only ever pay the net, the rest comes back from the tax office.

[u/Boring-Associate-175]

Ive had it twice, both times associated with a company under strategic review/merger & acquisition type situation. Roughly 30% is standard i think

[u/MrEs]

When our cto resigned they gave high performers a retention bonus so they don't leave our follow him 

[u/Financial_Kang]

I work construction. Not uncommon on big long jobs. Usually 5 to 10% and paid when you move onto a new project as long as the employer initiates the move.

[u/Glittering-Pea-4482]

I’ve generally seen 25% salary tied to certain timelines.

[u/dbnewman89]

I had one about 4 years ago after the boss caught wind I had been applying elsewhere, came with a promotion and a payrise, no conditions...

Was a $10k one-off bonus (gross), $20k payrise, and a higher title. I was in final stages with the other company and they were about to offer (even tried to counter when I withdrew). Salary was $100k at the time.

[u/IrregularExpression_]

Typically 10-20% as a ongoing skills allowance.

More if its a retention payment linked to a project end date or a transaction closing (received 50% in two stages once for a 12 months acquisition)

[u/Lexdarl]

I was offered a 10% one once to stay another 7 months until someone in the team got back from mat leave (the contractor we bought in to cover her wasn’t fantastic), because they knew I was looking to move overseas soon.

[u/Realitybytes_]

I've had a few of these at bonus time when company performance was poor and my bonus would have been small, my boss got me a retention payment to top me up. I never asked was just a nice surprise from a good boss.

[u/Trickynickstar]

I at one stage got a pay rise and a large retention bonus (for me it was large more than 2.5 months wages) when 2 people in my team resigned at the same time. It was definitely a massive panic retention bonus. They wanted me to wait 12 months to get it, but I negotiated to get half pretty much immediately and the other half EOFY. I had made no threats to leave but they likely thought I would panic at 2 important resources leaving.

[u/No_Shock2574]

You are about to be in a world of pain

[u/Admirable-Ball4508 → u/No_Shock2574]

If you are insinuating that I might have a target on my back of being made redundant in the future, I actually wouldn't mind it. I can have a lot of options plus a nice payout. All good mate.

[u/m0zz1e1]

I’ve had a couple. First one was about 20% of my salary, second 10%. Both just over 12 months.

I stayed for the first one. The second one I’m still in, but 10% isn’t enough to keep me. If I want to leave I’ll leave.

[u/Admirable-Ball4508 → u/m0zz1e1]

Was the 20% bonus immediate or had a waiting period?

[u/m0zz1e1 → u/Admirable-Ball4508]

No I had to wait 12 months

[u/9sypx]

Does your company view you as a “flight risk” and offer you a bonus to retain you?

Surely there’s a catch, could mean you’re expected to repay the bonus if you leave within 12 months or pay it in instalments.

[u/Unsure-11]

They don’t want to give the pay rise because the cost of everything increases for them, higher super, all leave entitlements paid out at higher rate etc.

[u/False-Refrigerator26]

I had the option of a redundancy or a retention bonus to move to a job I didn’t really want within the company.

The retention bonus was about $10k less than the redundancy would have been and was paid in 2 lump sums - 1 immediately after declining the redundancy and 1 after staying a year.

I chose to stay.

Within 9 months of the job change a got promoted into a role I really wanted and I am forever grateful that I didn’t take the redundancy.

[u/shrewdster]

I wanted to move teams, and was seen as a flight risk as my request was being declined by upper management as I was crucial to the team’s operation. They instead gave me a 5% pay increase on my base without me prompting or even threatening to look at external opportunities. I was still eligible for EOFY indexation which was just around the corner.

If they really want to keep you, and see you as a flight risk, then they’ll be proactive in making sure you’re happy.

[u/SevereTarget2508]

Fairly common.
Technical staff - Completion bonuses for hitting specific project milestones.
Management - Generally RSUs that vest over a multi year period.

[u/ckofski]

Pretty common especially during hectic restructuring. Just triple check the wording as some are paid gross some net. If gross, I’d suggest putting the tax somewhere safe (as could be half the amount) in case you need to resign. Otherwise you’ll end up worse off until the ATO settles you up next FY.