Golden Handcuffs

A A A

DEFINITION

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

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 of a lucrative ...
  2. Occupational Labor Mobility

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

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

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

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

    Compensation that is granted to upper echelon employees, directors, consultants ...
  7. Golden Handshake

    A stipulation in an employment agreement which states that the employer will ...
  8. Succession Planning

    A strategy for passing each key leadership role within a company to someone ...
  9. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that follows the name ...
  10. BHD (Berhad)

    The suffix Bhd. is an abbreviation of a Malay word "berhad," which ...
Related Articles
  1. Handcuffs And Smoking Guns: The Criminal ...
    Options & Futures

    Handcuffs And Smoking Guns: The Criminal ...

  2. 5 Lesser-Known Retirement And Benefit ...
    Retirement

    5 Lesser-Known Retirement And Benefit ...

  3. Executive Compensation: How Much Is ...
    Options & Futures

    Executive Compensation: How Much Is ...

  4. What's the difference between a golden ...
    Options & Futures

    What's the difference between a golden ...

  5. CEO Savvy And Stock's Success Go Hand ...
    Personal Finance

    CEO Savvy And Stock's Success Go Hand ...

  6. The Path To Becoming A CEO
    Professionals

    The Path To Becoming A CEO

  7. 5 Tips For Recession House Hunters
    Home & Auto

    5 Tips For Recession House Hunters

  8. Top 8 Ways Companies Cook The Books
    Personal Finance

    Top 8 Ways Companies Cook The Books

  9. Banker Or Broker: Which Career Is Right ...
    Professionals

    Banker Or Broker: Which Career Is Right ...

  10. Selling Premium As Small Caps Play Catch ...
    Options & Futures

    Selling Premium As Small Caps Play Catch ...

comments powered by Disqus
Hot Definitions
  1. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  2. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  3. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  4. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  5. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  6. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
Trading Center