Golden parachute - Wikipedia, the free encyclopedia - The Diigo Meta page

• 12 Nov 17
  

  sapitron
• 18 Jul 14
  

  charryan2005
• 23 Mar 09
  

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• 24 Sep 08
  

  Wesley Shu

  finance compensation executive_compensation golden_parachute perverse_incentive incentive

  • A golden parachute is a contractual agreement between a company and an employee (usually an upper executive) specifying that the employee will receive certain significant benefits if employment is terminated.
  • They are designed to reduce perverse incentives.
  • A golden parachute is an agreement between a company and an employee (usually upper executive) specifying that the employee will receive certain significant benefits if employment is terminated.
  • They are designed to reduce perverse incentives.

  • Proponents of golden parachutes argue that they provide three main benefits:

     
     
    1. Golden parachutes make it easier to hire and retain executives, especially in industries more prone to mergers.
     
    2. They help an executive to remain objective about the company during the takeover process.
     
    3. They dissuade takeover attempts by increasing the cost of a takeover, often part of a Poison Pill strategy.
  • The use of golden parachutes have caused some investors concern since they don't specify that the executive had to perform successfully to any degree.

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