Golden Parachute

Knowledge Center

   

Description of Golden Parachute. Explanation.

Contents

Premium

 

Definition Golden Parachute. Description.


Golden Parachute is a clause in an executive employment contract that provides the executive with a lucrative severance package in the event of their termination, for example in case of a takeover by an acquiring company. May include a continuation of salary, bonus and/or certain benefits and perquisites, as well as accelerated vesting of stock options.


It can be used as a defensive measure used to prevent hostile takeovers. With golden parachutes, employers enter into agreements with key executives and agree to pay amounts in excess of their usual compensation in the event that control of the employer changes or there is a change in the ownership of a substantial portion of the employer's assets.

 

Top executives are provided with a financial soft landing in the event that a takeover results in discharge. An (unwanted) sideeffect of a golden parachute is that executives that have not perfumed well are not being punished.

 

The company initiating the hostile takeover, on the other hand, will either have to pay this associated increased costs when acquiring the corporation or back off from the takeover.


Golden Parachute Special Interest Group


Special Interest Group (8 members)


Golden Parachute Forum  

Recent topics

  Cases of Golden Parachutes. Examples
Hi, do you know of a remarkable case or famous example in which a golden parachute was promised or actually given to someone?
Please enter a reacti...
     
 

Best Practices - Golden Parachute

Expert Tips - Golden Parachute



Advance yourself in business administration and management



Resources - Golden Parachute

Executive Compensation: Risk Factors and Ways to Manage Them

 
 

News about Golden Parachute


     
 

Videos about Golden Parachute


     
 

Presentations about Golden Parachute


     
 

Books about Golden Parachute


     
 

More about Golden Parachute


     



Accelerate your management career



Compare also: Acquisition Integration Approaches  |  Golden Handcuff  |  Golden Handshake  |  Golden Hello  |  Employee Benefits  |  Employee Stock Ownership Plan  |  Employee Stock Options  |  Phantom Stock Plan  |  Anti Hostile Takeover Mechanisms

Special Interest Group Leader

 
 

Return to Management Hub: Ethics & ResponsibilityFinance & Investing  |  Human Resources  |  Leadership  |  Strategy


More on Management  |  Return to Management Dictionary  | 

 

This ends our Golden Parachute summary and forum.



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2018 12manage - The Executive Fast Track. V15.0 - Last updated: 16-12-2018. All names of their owners.