golden parachute
a large exit bonus for top managers
STATISTICS
IN THE PRESS
Aflac CEO Daniel Amos, the first CEO to have shareholders vote on his salary, is saying no to his own GOLDEN PARACHUTE.
(CNBC)
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Whittle, who had earlier announced plans to retire at the end of the year, walked away with a GOLDEN PARACHUTE worth at least $12 million…
(TheStreet.com)
(CNBC)
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Whittle, who had earlier announced plans to retire at the end of the year, walked away with a GOLDEN PARACHUTE worth at least $12 million…
(TheStreet.com)
Did you
know?
golden parachute
noun phrase
- a clause in an executive's employment contract specifying that he/she will receive large benefits in the event that the company is acquired and the executive's employment is terminated
(www.investorwords.com)
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WORD ORIGIN
The expression "golden parachute" stems from the idea of a parachute as something that helps you make a soft landing. Golden of course refers to something of great value. They are also known as "golden handshakes."
Some people oppose golden parachutes, because they guarantee a high level of compensation regardless of performance. Carl Icahn, a controversial American investor and billionaire says golden parachutes are "absurd." He goes on to say that "proponents of this policy believe golden parachutes make it easier to hire and retain executives, discourage takeover attempts by increasing the price of the offer, or keep an executive objective when he or she is considering a proposal on the sale of their company."
He points out that "if you were about to receive a $400 million parachute by allowing the sale of the company you manage, you would sell to whomever at any price just to receive your benefits! This is clearly not in the interest of shareholders." The 2008 financial crisis has put golden parachutes in the spotlight. Some governments have even demanded that before companies receive financial assistance to help them through the crisis, they must agree to eliminate golden parachutes for managers.
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SMUGGLE OWAD INTO TODAY'S CONVERSATION:
"Golden parachutes are much less common these days."
noun phrase
- a clause in an executive's employment contract specifying that he/she will receive large benefits in the event that the company is acquired and the executive's employment is terminated
(www.investorwords.com)
---
WORD ORIGIN
The expression "golden parachute" stems from the idea of a parachute as something that helps you make a soft landing. Golden of course refers to something of great value. They are also known as "golden handshakes."
Some people oppose golden parachutes, because they guarantee a high level of compensation regardless of performance. Carl Icahn, a controversial American investor and billionaire says golden parachutes are "absurd." He goes on to say that "proponents of this policy believe golden parachutes make it easier to hire and retain executives, discourage takeover attempts by increasing the price of the offer, or keep an executive objective when he or she is considering a proposal on the sale of their company."
He points out that "if you were about to receive a $400 million parachute by allowing the sale of the company you manage, you would sell to whomever at any price just to receive your benefits! This is clearly not in the interest of shareholders." The 2008 financial crisis has put golden parachutes in the spotlight. Some governments have even demanded that before companies receive financial assistance to help them through the crisis, they must agree to eliminate golden parachutes for managers.
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SMUGGLE OWAD INTO TODAY'S CONVERSATION:
"Golden parachutes are much less common these days."
