A golden parachute is a corporate provision that grants key executives large payments when management of the company changes. This is a defense against hostile takeovers in that it makes them costly and can result in loss of key management personnel.
Golden parachute is also used to refer in general to the super-cushy severance packages executives get when they leave a company. Investors should be upset when ill-performing execs resign with a multimillion-dollar golden parachute to soften their "unemployment."
Related Fool Articles
Recent Mentions on Fool.com
- 3 Ways AT&T's DIRECTV Buyout Might Fail
- I?m Adding to My Sizeable Position in First Financial Northwest
- It's Time to Look at Lululemon's Corporate Governance Policies
- However You Slice It, CEO Pay Is Ripping You Off
- I?m Buying This Profitable Bank Below Book Value
- The $22.5 Million Question: Was Fifth & Pacific?s CEO Fired or Did He Resign?