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Retention Grant
A stock grant awarded to encourage an executive or a key employee to stay with the company. The grant is often restricted stock that vests over a specified time, as this will have value as long as the person is still working at the company when the grant vests. These grants are usually made when other forms of equity compensation, such as stock options, are underwater; after an acquisition, to the acquired company's key people; or when factors beyond an executive's control (e.g. a broad economic downturn) have undercut other forms of his or her compensation. These grants are also called inducement awards.
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