Stay—for Me! Using Retention Agreements to Keep Key Personnel During Turbulent Times

When an employer contemplates an acquisition, merger, or other corporate transaction, the employer often wants to be certain that key employees remain during (and often for a time after) the transition. Retention agreements are useful for this purpose and can provide for a retention bonus, enhanced severance, equity (including stock options or acceleration of such options), or a combination of these or other benefits to incent the employee to stay, even when the future is uncertain.

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• Retention Bonus and Change in Control Agreement
  Learn how retention bonuses can be a useful tool where there is a concern that the departure of key employees could adversely impact a company's ability to, for example, achieve project-based or strategic goals, successfully grow the business, or maintain a competitive advantage. Retention bonus agreements generally provide for a financial benefit that is only earned by the employee if they stay with the company for a specified retention period, but they sometimes impose other conditions to payment, such as the occurrence of a specified event or achievement of a performance goal.  

• Executive Retention Bonus (Letter Agreement)
  See how retention bonuses (without a change in control) typically are a percentage of the executive's base compensation (often 10-50%). They can be used where the individual is performing an important function/project that can’t be upset if they leave mid-project.

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