The bigger the special retention grant 💰, the shorter the executive stays on board
I did not expect to write that sentence
But FW Cook's updated 2025 study is unambiguous. Here is the data most boards won't put on a slide:
Special retention grants of $3m-$5m kept executives 4.1 years on average
Grants greater than $5m kept them just 2.6 years
Smaller grants under $3m kept them 3.5 years
Bigger equity = shorter tenure. Not longer!
Why? When someone has mentally left, more money essentially accelerates the exit rather than changes the decision. FW Cook's phrasing: executives "highly likely to depart were not swayed by 'Hail Mary' grants"
Now layer on 2 findings that should make every #CompCommittee pause:
1. 79% of CEOs who received a retention grant eventually left the company
2. 79% of CEOs who did NOT receive one eventually left too
Identical. The grants do not prevent departure, they delay it
They delay it specifically: Non-receivers most commonly leave in year 1 (30% of exits). Receivers most commonly leave in year 3 (32%) — exactly when shares vest 📆
So retention grants are not "retention." They are a vesting-timed handcuff. A 2-3 year window. Nothing more
🔍 Which makes the next number interesting:
-> Retention grants are more than 2x as common when the incoming CEO is external (64%) vs internally promoted (28%). Boards behave as if external hires destabilise the team, & internal promotions do not
This is wrong. And it is expensive 💸
Internal CEO promotions create the "insider-outsider" problem — you just elevated one peer over the others. Those runners-up are the most bruised and the most flight-risky — and the LEAST covered by retention equity
Here is the uncomfortable truth. Special retention equity is a narrow tool. It buys roughly 2-3 years of C-suite stability after a CEO change. That is it. It is not a succession strategy. Not a culture strategy. Not a leadership-team strategy. It is merely a bridge 𖣑
And bridges 𖣑 only work if you have built something on the other side worth walking toward
In my CEO transition work, the board conversation rarely starts with compensation. It starts with: which of these executives actually wants to be here for the next chapter — and which are we paying to pretend?
❓ Question for every Compensation & Nominating Chair reading this: If the equity vanished tomorrow, who on your C-suite would stay?
📣 But don't take my word for it. Take it from a recent CEO client of mine:
💬 "The experience of being a coaching client of Navid is a powerful one. Not only did I gain fascinating insights about my own leadership style, but I was also able to become a more impactful executive & gained valuable insights into how I can bring out the best in my leadership team. I would wholeheartedly recommend Navid to any executive who is looking to maximise their leadership impact“
#Boards #CEOTransitions #MasteringExecutiveTransitions #ETQ
About Navid Nazemian
Ranked as the world’s #1 Executive Coach by CEO Today for the third year running, I partner with senior leaders to navigate complexity, accelerate performance, and lead through critical transitions. Over the past two decades, I’ve supported hundreds of executives in overcoming unproductive thinking and solving their most complex leadership challenges—helping their organizations build world-class cultures and create lasting value.
If you’d like to reflect on a leadership challenge, an upcoming transition, or how I might support you, you’re very welcome to reply directly to this email.
You can also:
1. Connect with me on LinkedIn for additional leadership insights
2. Explore my international best-selling book "Mastering Executive Transitions: The Definitive Guide" described by Dr. Marshall Goldsmith as “THE ultimate guide to executive transitions to help leaders achieve their highest potential”
3. Enrol in my newly launched e-Learning programme Mastering Leadership Transitions - my transition methodology in a self-paced format for leaders at every level
4. Work with me on a per-session basis via EveryExpert - a flexible alternative to a full coaching engagement, starting with a complimentary 15-minute Chemistry Call
What's Next? More insights on leadership, transitions, and executive effectiveness are coming your way next week. I’d genuinely value your perspective—feel free to share your reflections by replying to this email. I read every response.
Navid
