A “golden handshake” refers to a clause in an executive employment contract that provides the executive with a significant severance package in the case that she loses her job through firing, restructuring, or even scheduled retirement.
Why do companies pay golden handshakes?
The Money Show’s Bruce Whitfield interviewed Khokhela Consulting MD Laurence Grubb.
Listen to the interview in the audio below (and/or scroll down for quotes from it).
Don’t confuse ‘golden handshakes’ with ‘golden handcuffs’ or ‘golden parachutes’! There’s a lot of gold in the corporate world!— Laurence Grubb
These things can drag on for a long time… the impact on the company… often the board finds it easier to agree on a number and get rid of the executive in that way…— Laurence Grubb
It’s to be discouraged, completely.— Laurence Grubb
Some companies show a tendency for being comfortable with offering golden handshakes.— Laurence Grubb
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