Golden Parachute
A substantial benefit package given to executives if they are terminated after a merger or acquisition, often used to secure executive support for the deal.
Implications
A large financial compensation package guaranteed to an executive in the event of a company takeover, merger, or change in control, often including cash bonuses, stock options, and other benefits, intended to protect the executive's financial interests during turbulent times.
Example
Example: A CEO�s contract includes a golden parachute clause that provides a multimillion-dollar payout if the company is acquired and the CEO is forced to step down, ensuring financial security despite the loss of their position.
Related Terms
Different from golden handcuffs, which are designed to retain executives, golden parachutes provide financial protection in case of job loss due to a corporate takeover or merger.
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