Golden Parachutes

A golden parachute is a provision in an employment contract that grants lucrative severance benefits to an executive if control of the company changes hands, as by a merger. Most definitions offered by legal authorities stress three elements: (1) a lucrative or attractive severance package, (2) available to a few selected senior executives, (3) in a change of control situation for the company. Some also define it as compensation to a chief executive officer or other C-level executive for losing his or her job. Others do not so restrict its availability to those who actually lose their jobs, but extend it as well to those who lose job status in the event of a change in control.

In common usage, the term golden parachute refers to ...