One bonus may not solve two different retention risks
Separate transaction execution from post-closing continuity.
Key leaders can carry two distinct burdens during a sale. First, they must keep the business performing while helping with management presentations and diligence. Second, a buyer may need them to remain after closing through a transition, integration period, or earnout. One undifferentiated bonus may not address both risks.
A two-part structure can align the timing more precisely. The first component rewards work required to complete the transaction: maintaining performance, producing accurate information, supporting diligence, and remaining through closing. The second component rewards continued service or specific post-closing responsibilities over a defined period.
The details matter. Eligibility, amount, payment timing, performance conditions, treatment on termination, and interaction with existing compensation should be documented clearly. The first payment should not encourage short-term behavior that harms the company, and the second should not depend entirely on outcomes the executive cannot control. Tax, employment, and transaction counsel should review the structure.
Communication is equally important. A bonus introduced too early can reveal a confidential process. One introduced too late can feel coercive or fail to retain the person. Owners should decide which leaders are genuinely essential, when their help becomes necessary, and what commitment the company is asking them to make.
The purpose is not to pay everyone for doing their job. It is to recognize unusual transaction work and protect continuity when a small number of people become critical to execution.