COMP NEWS – Performance bonuses are commonplace for many United States employees, however, some companies have begun using retention bonuses to encourage and reward employees for remaining with the company.

Recently, Fat Brands’ Chief Financial Officer was offered $200,000 to remain with the company through the first quarter of 2023.

Ken Kuick, the chief financial officer of Fat Brands, is getting an extra $200,000 and all he has to do is keep his job.

According to a federal-securities filing on Tuesday, Kuick is receiving the retention bonus “in recognition of his ongoing contributions to the company.” He will have to repay that bonus if he leaves before the company’s first-quarter earnings report is filed next year—unless that departure is “without cause.”

This retention bonus offer comes amidst a period of major change for the food giant, as recent restaurant chain acquisitions have complicated operations.

Fat Brands has acquired nearly $1 billion worth of restaurant chains over the past year-plus, including Johnny Rockets, Twin Peaks, Fazoli’s and the multi-concept operator Global Franchise Group, the owner of Great American Cookies, Round Table Pizza and Hot Dog on a Stick. The acquisitions have increased the size of Fat Brands substantially in just a short period of time. 

All these deals required some heavy lifting on the part of Kuick’s department, in that they were funded with a series of whole business securitizations, meaning Fat Brands bought all the companies using large amounts of debt.  

While retention bonuses are not unheard of, recent economic trends in labor supply and demand are liable to increase their popularity, particularly among executives and other highly sought-after positions.

Retention bonuses are not uncommon. They can be paid when companies fear the departure of key executives—such as when there are potentially major changes on the horizon.

To read more about CFO retention bonuses, click here.

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