A golden handshake or golden parachute is a clause in an executive employment contract that provides the executive with a significant severance package in the case that the executive loses their job through firing, restructuring, or even scheduled retirement. This can be in the form of cash, equity, and other benefits, and is often accompanied by an accelerated vesting of stock options. A clause is a group of words consisting of a subject and a predicate, although, in non-finite clauses, the subject is often not explicitly given. ... An individual can face termination of employment, or job loss, for one of many reasons. ... Restructuring is the corporate management term for the act of partially dismantling and reorganizing a company for the purpose of making it more efficient and therefore more profitable. ... Retirement is the status of a worker who has stopped working. ... Cash usually refers to money in the form of currency, such as bills or coins. ... This article is about concept of equity in Anglo-American jurisprudence. ... In law vesting is to give an immediately secured right of present or future enjoyment. ... A stock option is a specific type of option with a stock as the underlying instrument (the security that the value of the option is based on). ...

Typically, "golden handshakes" are offered only to high-ranking executives by major corporations and may entail a value measured in millions of dollars. Golden handshakes are given to offset the risk inherent in taking the new job, since high-ranking executives have a high likelihood of being fired and since a company requiring an outsider to come in at such a high level may be in a precarious financial position.

In more general usage, "golden parachute" has come to signify any deal that - be it through money, another job (usually well-paid but more ceremonial, a sinecure) - makes it easier for an organization to get rid of a high-ranking member without fuss, trouble, protests, or bad press. This may, e.g., be the offer of an ambassadorship (which is considered prestigious and socially desirable) to a minister not wanted anymore in the cabinet, or the promotion of a manager to chairman of the board of an affiliate. A sinecure (from Latin sine, without, and cura, care) means an office which requires or involves little or no responsibility, labour, or active service. ...

External link

[1] - The Guinness World Records page on F. Ross Johnson, the record holder for largest Golden handshake (US$53,800,000 from RJR Nabisco) in February 1989 The Guinness Book of Records (or in recent editions Guinness World Records, and in previous US editions Guinness Book of World Records) is a book published annually, containing an internationally recognized collection of superlatives: both in terms of human achievement and the extrema of the natural world. ... F. Ross Johnson was the former chief executive of RJR Nabisco. ... Reynolds American Inc. ... 1989 is a common year starting on Sunday of the Gregorian calendar. ...