Cash has been the favored tool to retain talent through
an M&A, but a cost-conscious business environment calls for
something different.
Global disruptions, economic uncertainty and the high cost of
capital weighed down M&A activity for most of 2023. However,
2024 has seen renewed activity, especially in the U.S., buoyed by a
stronger-than-expected economy and employment rate.
As before, M&A success will continue to require thorough due
diligence, thoughtful integration and deal value capture. However,
traditional approaches to talent retention – if only to avoid
disruption to a target's operations – are under pressure
in today's still cost-conscious business environment.
For example, acquirers historically have used cash bonuses to
retain a target's key leadership members and employees.
Typically, these time-bound (vs. performance-based) retention
bonuses are awarded over a period of at least one year and as a
percentage of base salary. They also can be
