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Posted: 14th January 2022
We are a start-up business and we would like to put a retention bonus in place (or a success bonus) to incentive people to stay until series B. Has anyone done this, what % did you do, was it across the board and was it successful?
Would be great to talk to anyone if they have any experience.
Yes we did a couple of years ago and it was an absolute success. It is a retention bonus calculated based on the annual performance bonus. The rules, more or less are:
· Your retention bank is calculated based on your annual performance bonus.
· Your annual on target bonus is set as a % of your base salary for 2020
· The companycontributes an additional 50% of your annual bonus into the bank.
· The retention bank contributions are paid in March of each year when performance bonus payments are made.
· The amount in your retention bank will accrue annually.
· After receiving three years of bonus payments, you may withdraw one third of the funds accrued in your retention bank
· Contributions will start from March 2021 and continue each year. You will be able to make your first withdrawal from March 2023 onwards.
· This scheme requires reauthorisation every three years.
If they leave the lose it, and every year they receive a third of the pot if that makes sense.
Feel free to contact me if you need more information.
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