Golden Life Jacket

AAA

DEFINITION of 'Golden Life Jacket'

An exceptional compensation package offered by the acquiring company to the top executives of the company being bought. The offer is meant to keep those executives interested in retaining their positions.

INVESTOPEDIA EXPLAINS 'Golden Life Jacket'

A form of sweetheart deal, golden life jacket benefits include in-the-money options and additional large bonuses. The options offered may not be in the best interests of shareholders, as the executive holding the options could be unaffected by large swings in share prices.

Furthermore, there is less incentive to make the best possible decisions, which could impact its share price, because the executives often receive the benefits regardless of how well the company performs.

RELATED TERMS
  1. Golden Bungee

    A benefit conferred to select top executives that is a combination ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for ...
  3. Golden Coffin

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

    The combining of two or more companies, generally by offering ...
  5. Sweetheart Deal

    A merger, a sale or an agreement in which one party in the deal ...
  6. Fat Cat

    A slang word used to describe executives who earn what many believe ...
Related Articles
  1. What Are Corporate Actions?
    Bonds & Fixed Income

    What Are Corporate Actions?

  2. The Basics Of Mergers And Acquisitions
    Options & Futures

    The Basics Of Mergers And Acquisitions

  3. The Top Technical Indicators For Options ...
    Options & Futures

    The Top Technical Indicators For Options ...

  4. How To Buy Oil Options
    Options & Futures

    How To Buy Oil Options

comments powered by Disqus
Hot Definitions
  1. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  2. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  3. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  4. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  5. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
  6. Direct Participation Program - DPP

    A business venture designed to let investors participate directly in the cash flow and tax benefits of the underlying investment. ...
Trading Center