Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 2025
Definition
Golden parachutes are substantial benefits guaranteed to top executives if they lose their position due to a merger or takeover. These benefits can include cash bonuses, stock options, or generous severance pay.
Related terms
Severance Pay: Compensation awarded to an employee upon termination of employment, often based on length of service.
Merger: The combination of two or more companies into a single legal entity, often leading to organizational restructuring and executive job displacement.
Takeover: An acquisition where one company assumes control of another, potentially triggering the activation of golden parachutes for displaced executives