When Greater Aircraft acquired Middling Aircraft,the executives of the two companies identified key employees they needed for the combined companies' success.One of them was Michael,the vice president of engineering.The executives offered Michael a one-time bonus of $25,000 if he stayed with Greater Middling for 12 months following the acquisition.In this scenario,Michael's the $25,000 represents _____.
A) a commission
B) a retention bonus
C) stock options
D) merit pay
E) a differential piece rate

Question

Quizplus · Accepted Answer

The $25,000 bonus offered to Michael is a retention bonus, as it is meant to incentivize him to stay with the company for a specified period of time after the acquisition. A commission is typically a percentage of sales or revenue that an employee earns as compensation for their sales efforts. Stock options grant an employee the option to purchase company stock at a certain price. Merit pay is an increase in salary granted to an employee based on their performance. A differential piece rate is a form of pay where employees earn different rates depending on their level of productivity. None of these other options accurately describe Michael's bonus.

When Greater Aircraft Acquired Middling Aircraft,the Executives of the Two