Golden parachutes are extraordinary payments companies make to executives in connection with a change in ownership or control of a company. It is also a form of bonus compensation designed to retain talented executives that calls for a substantial cash payment if the executive quits, is fired, or simply retires. In addition, the golden parachute may also contain covenants that allow the executive to cash in on non- invested stock compensation.
Golden parachute is an executive termination package that provides financial protection by guaranteeing employment or severance pay even when another firm takes over