Definition of Golden parachute:
Golden parachutes are thus named as such because they are intended to provide a soft landing for employees of certain levels who lose their jobs.
A large payment or other financial compensation guaranteed to a company executive should the executive be dismissed as a result of a merger or takeover.
A golden parachute consists of substantial benefits given to top executives if the company is taken over by another firm, and the executives are terminated as a result of the merger or takeover. Golden parachutes are contracts with key executives and can be used as a type of anti-takeover measure, often collectively referred to as poison pills, taken by a firm to discourage an unwanted takeover attempt. Benefits may include stock options, cash bonuses, and generous severance pay.
Huge bonus and/or a lucrative contract offered to a director or key employee to compensate for loss of office after a takeover or merger. It may also include a stockholding (shareholding) in the new setup.
How to use Golden parachute in a sentence?
- In addition to large bonuses and stock compensation, golden parachutes may include ongoing insurance and pension benefits.
- Golden parachutes are lucrative severance packages inked into the contracts of top executives that compensate them when they are terminated.
- The practice is controversial as poorly performing or short-lived CEOs and other top executives can get paid large sums for little or poorly perceived work.
Meaning of Golden parachute & Golden parachute Definition