Golden Handcuffs

AAA

DEFINITION of 'Golden Handcuffs'

A collection of financial incentives that are intended to encourage employees to remain with a company. Golden handcuffs are offered by employers to existing employees as a means of holding onto key employees and increasing employee retention rates. Golden handcuffs are common in industries where highly-compensated employees are likely to move from company to company.

Examples of golden handcuffs include employee stock options that do not vest until the employee has been with the company for several years, and contractual agreements that stipulate certain bonuses or other forms of compensation must be returned to the company if the employee leaves before a certain date. Also called golden handshakes.

INVESTOPEDIA EXPLAINS 'Golden Handcuffs'

Employers invest significant resources in the hiring, training and retaining of key employees. Golden handcuffs are intended to help employers hold onto employees that they've invested in. Other forms of golden handcuffs include contractual obligations that specify an action that an employee may or may not perform, such as a contract prohibiting a network television host from appearing on a competing channel, and SERPS – supplemental executive retirement plans - that are funded entirely by the employer.

RELATED TERMS
  1. Golden Bungee

    A benefit conferred to select top executives that is a combination ...
  2. Occupational Labor Mobility

    Refers to the ease with which workers can switch career fields ...
  3. Golden Coffin

    A lucrative death-benefit policy given to top executives. A golden ...
  4. Golden Hello

    A signing bonus offered to a candidate from a rival company. ...
  5. Phantom Stock Plan

    An employee benefit plan that gives selected employees (senior ...
  6. Camouflage Compensation

    Compensation that is granted to upper echelon employees, directors, ...
RELATED FAQS
  1. What's the difference between a golden handshake and a golden parachute?

    A golden parachute is an agreement between a company and an employee that guarantees the employee certain benefits, like ... Read Full Answer >>
Related Articles
  1. Retirement

    5 Lesser-Known Retirement And Benefit Plans

    These plans aren't widely used, but they fill a specific niche for employees in certain situations.
  2. Options & Futures

    Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street

    From godfathers to perps, familiarize yourself with the "criminal elements" creeping around Wall Street.
  3. Options & Futures

    Executive Compensation: How Much Is Too Much?

    The proxy statement can help determine whether a CEO is well compensated - or just overpaid.
  4. Investing

    What Tech Companies Seeking Funding Must Overcome

    Tech companies face a unique set of challenges, including a need for timely responses to changes in technology and difficulty recruiting the right talent.
  5. Economics

    Vietnam -- New Asian Hot Spot For Tech Investment

    Vietnam now has a rapidly expanding tech sector that's attracting investors from around the globe due to low business costs and highly skilled workers.
  6. Options & Futures

    Top Brokers Offering Tools For Covered Calls

    Here are the brokers that offer the best tools for investors and traders to write covered calls and covered puts.
  7. Economics

    Effects of OIS Discounting for Derivative Traders

    The use of OIS discounting has important implications for derivative valuations and could positively or negatively impact a trader's profit or loss.
  8. Investing

    What are Preference Shares?

    Preference shares, also referred to as preferred shares, are equity shares that give the shareholders certain rights ahead of common shareholders. For instance, when the corporation declares ...
  9. Stock Analysis

    Will American Airlines Fall Back To Earth In 2015?

    The airline industry enjoys blockbuster profits, and American Airlines Group has been a key beneficiary of the favorable trends that have lifted stocks.
  10. Stock Analysis

    3 Things I Learned From The Container Store's 10K

    Since going public at the end of 2013, The Container Store's shares have fallen by roughly half their value. But not all is not lost.

You May Also Like

Hot Definitions
  1. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  2. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  3. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  4. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  5. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
  6. Currency Carry Trade

    A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase ...
Trading Center