General
golden parachute
What does golden parachute mean?
A contractual agreement guaranteeing a senior executive significant benefits, such as severance, bonuses, and stock, if their employment is terminated, especially following a merger or acquisition.
"The CEO was ousted but floated away on a golden parachute worth eight figures."
Origin
Business idiom dating to the 1960s-1980s wave of corporate takeovers.
Frequently asked questions
What is a golden parachute?
A contractual guarantee of large benefits like severance, bonuses, and stock for a senior executive if they lose their job, especially after a merger or acquisition.
Why do companies offer golden parachutes?
They can help retain executives and reduce their resistance to takeovers by cushioning the financial blow of losing their role.
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