Business, Legal & Accounting Glossary
Golden handcuffs are various incentives offered to key executives to make sure they don’t leave the company. Golden handcuffs can take several forms. For example, golden handcuffs may entail deferred compensation, under which pay for past services are postponed to some future date. Golden handcuffs can also involve stock options, which the executive cannot exercise until after some length of service to the firm. Another form of golden handcuffs is restricted stock, which is transferred to the executive but remains subject to forfeiture if the manager leaves the firm at an early date, or does not reach certain performance goals. Note that golden handcuffs are also sometimes part of an anti-takeover strategy adopted in mergers and acquisitions. Under this golden handcuffs scenario, key staff immediately become vested in stock options once the company is taken over. With their golden handcuffs thus removed, many key executives will want to quit the firm, leaving the new owners without the experienced talent they need to run the company. This unlocking of golden handcuffs serves as a poison pill to discourage takeover attempts.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Golden Handcuffs are sourced/syndicated and enhanced from:
This glossary post was last updated: 9th February, 2020 | 8 Views.