Retention Bonus vs. Leaving: The True Financial Cost
Example: Retention bonus offered (gross): 50000 $ · Unvested RSUs current value: 80000 $ · Months until RSUs finish vesting: 18 · Expected stock growth during vest period: 5 %/yr · Annual salary increase at new job: 40000 $ · Months before new-job equity vests (cliff): 12 · Combined marginal tax rate: 30 %
| Leaving wins financially? (1=yes, 0=stay wins) | 0 |
| Net financial benefit of leaving (negative = stay wins) | $-67,252 |
| Total cost of leaving (bonus + RSUs forfeited) | $95,252 |
| After-tax salary benefit at new job | $28,000 |
Worked example
Retention bonus $50,000 (after-tax: $35,000) + unvested RSUs $80,000 growing to $86,000 in 18 months (after-tax: $60,200) = $95,200 total cost of leaving. New job pays $40,000 more per year; over 12 months before new equity vests, that is $28,000 after tax. Net benefit of leaving: $28,000 − $95,200 = −$67,200. Staying wins by $67,200 in this case. But add a $60,000 base raise and 12 months of new equity worth $100,000 — the math flips.
Frequently asked questions
Does a new employer typically cover unvested RSUs I leave behind?
Increasingly yes — particularly in tech and finance. A competing offer may include a 'make-whole' grant of RSUs or cash to compensate for unvested equity you forfeit. This should be negotiated explicitly and confirmed in the offer letter before resigning.
What is the retention bonus clawback period?
Retention bonuses typically include a 12–24 month clawback clause: if you leave voluntarily or are terminated for cause within that window, you repay the gross amount. Clawback terms are often negotiable at signing. Always have an employment attorney review before signing.
Should I factor in non-financial reasons to leave or stay?
Absolutely — career trajectory, management quality, learning opportunities, work-life balance, and culture affect lifetime earnings far more than any single windfall event. Use this calculator to understand the financial cost of each path, then weigh it against non-financial factors you care about.
How does the new job's equity affect the comparison?
New equity grants often take 12–24 months to vest significantly (cliff vest or quarterly after cliff). During that window, you are earning salary but limited equity — the salary increase carries most of the financial benefit. This tool models that by calculating salary benefit over the new-job vest period only.