Executive Retention Bonus in the Gulf: When a Board Should Pay

An executive retention bonus is a payment to a named senior leader, to keep them through a defined event such as a sale, a listing, a succession or a restructuring. Gulf boards use it often, and in JOH Partners' observation they tend to pay it too widely, too early and in cash. The result is that the people who receive it were mostly staying anyway, and the one or two who were thinking of leaving are no more attached than before. This piece sets out what a retention bonus should buy, why Gulf groups so often get it wrong, and the four questions a remuneration committee can ask before it approves one. It also covers the case no committee likes to raise, which is when the better answer is to let someone go.

What an executive retention bonus is for

A retention bonus has one job: to keep a specific person in a specific role until a specific thing has happened. The event might be a sale of the group, a listing, the handover to a new chief executive, or the end of a restructuring. Without the event, there is no end date, and without an end date there is no way to say whether the payment worked.

It helps to be clear about what it is not. A sign-on or buy-out award is paid to a new hire to attract them, and JOH's perspective on sign-on bonuses and buy-out awards in Gulf hires covers that decision. Severance is paid on the way out, and the perspective on executive severance in the Gulf covers that one. A long-term incentive plan is a standing programme for the whole executive layer, which JOH's perspective on the long-term incentive plan without an exit explains. A retention bonus sits beside all three. It is paid to someone already in the job, for a single reason, and it ends.

That sounds obvious. In practice the three are often mixed. A board that has no long-term plan reaches for a retention payment to do the plan's work, and a board that has promised too little at hiring tries to make up the difference later. Each use dilutes the one thing a retention bonus does well.

Why Gulf groups tend to get it wrong

Gulf executive pay has leaned on cash for years. JOH's Gulf Executive Reward Report 2026 restates Aon's analysis of 100 listed GCC companies over 2016 to 2025, which found cash accounts for roughly 85 to 95 per cent of executive remuneration. In a market like that, a cash retention payment is the natural instrument, and in the same report JOH notes that in energy, industrials and giga-project businesses retention over a multi-year build is the dominant concern. Both facts push boards toward a payment that is easy to approve and easy to pay.

In JOH's observation, three habits follow. The first is breadth. A board announces a retention pool for the whole senior team, because singling people out feels divisive. The second is timing. The money is paid at signing of a transaction, or at the start of a restructuring, because that is when the anxiety peaks. The third is form. It is paid in cash, in one go, with few conditions.

Each habit weakens the payment. A broad pool pays out to people who had no intention of leaving and tells the two who did that they are valued at the same rate as everyone else. Money paid at the start leaves nothing to stay for. Cash with no conditions leaves the board with no way to recover it if the person goes in month three. The result is an expensive signal, and the people who read it most carefully are the ones the board was worried about.

A retention bonus should buy something the board cannot get any other way. If the person would have stayed anyway, the board has paid for nothing.

A composite: the pool that kept the wrong people

This is a composite of situations JOH has seen, with the details changed. It is not a client case.

A family group prepares to sell a division. The board is worried that the division's senior managers will leave before the sale closes, and approves a retention pool for fourteen of them, paid in cash on signing the sale agreement. The pool is equal to six months' pay for each person.

Six months later the sale closes. All fourteen are still there, and so, in truth, would most of them have been. Two managers who were critical to the buyer's integration plan, the finance lead and the head of operations, had been approached by a competitor during the process. Each had stayed, but each told the buyer in the first month after closing that they would leave within the year. Both did. The money they received had been paid long before, with no condition attached to it.

The lesson is not that retention payments fail. It is that this one was priced for fourteen people when two mattered, and paid at the one moment when it did the least. A payment to two named people, with the larger part due six to twelve months after closing, would have cost less and bought what the board actually wanted.

Four questions for the remuneration committee

A committee that is asked to approve a retention bonus can put four questions to management before it agrees anything. JOH's perspective on the remuneration committee and who sets executive pay explains why the committee, and not the chief executive alone, should be the one asking.

Who are the named people, and why those people? The honest list is short. It should name the roles the company cannot run the event without, and say what each person holds that no one else does. If a name is on the list because it is awkward to leave it off, it should come off.

What exactly is the event, and when does it end? A retention bonus without a defined event drifts into a pay rise. The event should be one the board can recognise: completion of a sale, the first day of trading, the arrival of a successor, the delivery of a restructuring plan. The payment is tied to it, and to nothing else.

When is the money paid? The larger part should be paid after the event, not before. Many boards split it, with a smaller part at the milestone and the remainder six to twelve months later, subject to the person still being in the role. The board then has a reason for the person to stay on after the event, which is when the buyer or the new chief executive most needs them.

What can be recovered, and from whom? A retention award should carry recovery terms. JOH's perspective on malus and clawback in Gulf executive pay explains why a clause can look sound on paper and still fail against local employment law, so the terms should be tested with counsel before the executive signs.

What the executive sees

A retention offer is never read alone. The executive reads it alongside the rest of the package, including allowances, any deferred bonus and the end-of-service payment they have already built up. A board that wants the offer to work should price it with that in mind. The full set of pay elements a senior Gulf executive weighs before accepting an offer is laid out in JOH's published reading of how allowances, long-term incentives and end-of-service pay add up in a senior package, and a committee can use it to see what the executive will compare the retention payment against.

This matters because a retention bonus is a signal, and signals are read in context. Sandrine Bardot, in her conversation on personalising rewards for the Middle East workforce, describes compensation as the loudest message an organisation sends about what it values, and says that the gap between what a company intends and what an employee hears is where retention problems begin. A retention payment sent to fourteen people and meant for two is a message that nobody quite hears as intended.

Cash, deferred cash or shares

Most Gulf companies are not listed and cannot grant listed shares, so retention awards are usually cash or deferred cash. That is not a weakness. A deferred cash award with a clear vesting date and recovery terms does the job, provided the committee does not treat it as a substitute for a proper long-term plan. In JOH's Gulf Executive Reward Report 2026, the mix at the listed and IPO-bound end of the market is moving toward a target annual bonus of around 50% of base and long-term incentives of around 100% of base. A retention award should sit on top of a package like that, not stand in for part of it.

Boards sometimes call this kind of award golden handcuffs. The phrase is accurate in one respect: the payment makes it costly for the person to leave. It is misleading in another, because handcuffs hold people who want to go, and a board that relies on them has usually not solved the reason the person wants to leave.

A bonus can delay a departure. It cannot fix a job that no longer fits, a chair who has stopped listening or a strategy the person no longer believes in.

When the honest answer is to let someone go

Some retention discussions should end differently. If the board has to pay a large amount to keep someone through an event, and the person has already decided to go, the payment is a delay, and an expensive one. If the person is critical but has lost the board's confidence, the better course may be a planned handover, a defined notice period and a successor already identified.

A committee can test this with a single question: what would we do if this person resigned tomorrow? If the answer is that the company would manage, perhaps with an interim, then the retention bonus is a comfort and not a need. If the answer is that the event would fail, the committee has found a role that needs a succession plan as much as it needs a payment. JOH's engagement placing a chief investment officer into a GCC private equity firm ahead of a fund deployment shows how a role that carries a fund cycle is scoped before the pay is set. A board that wants a continuing read on who in its executive layer is at risk, and how engaged its key people are, can use platforms such as Board Pulse to see it before the resignation letter arrives. The group holdings where these awards are most common are set out on JOH's group holdings sector page.

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Key takeaways

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JOH Partners is an executive search and senior executive recruitment firm advising chairs, remuneration committees and family groups on executive appointments and pay across the GCC, the UK and Singapore. For the figures behind this piece, download the Gulf Executive Reward Report 2026, then engage a partner for a confidential conversation about how your retention terms compare. Boards that want a continuing read on executive engagement can also request a Board Pulse demo.