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. Golden Hello

    A signing bonus offered to a candidate from a rival company. ...
  5. Golden Parachute

    Substantial benefits given to a top executive (or top executives) ...
  6. Merger

    The combining of two or more companies, generally by offering ...
Related Articles
  1. Bonds & Fixed Income

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  2. Options & Futures

    The Basics Of Mergers And Acquisitions

    Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work.
  3. Options & Futures

    A Detailed Look Into China's Options Market

    As the Chinese options market gradually takes shape, we provide an overview, including details of the initial phase and building blocks, primary beneficiaries, the impact on the overall financial ...
  4. Options & Futures

    How do you trade put options on E*TRADE?

    Learn all about put option trading at E*TRADE. Explore margin accounts and become familiar with the different types of option writing.
  5. Trading Systems & Software

    How do you trade put options on Ameritrade?

    Learn about option trading with TD Ameritrade. Explore the different types of options and their possible impacts on the investors that write them.
  6. Personal Finance

    Do minimum wage laws make labor a fixed or variable cost?

    Find out why labor is a classified as a semi-variable cost by the minimum wage laws; labor has elements of both fixed costs and variable costs.
  7. Options & Futures

    What is the difference between a short position and a short sale?

    Learn how short selling and short positioning are different, specifically in regards to the nature of the commodity being bought and sold.
  8. Options & Futures

    Are there any risks involved in trading put options through a traditional broker?

    Explore put option trading and different put option strategies. Learn the difference between traditional, online and direct option brokers.
  9. Options & Futures

    Options -- Accessing Stakes In Apple At Less Cost

    Finding Apple stock costly to trade? Here are multiple ways to trade it through low-cost Apple options.
  10. Options & Futures

    These Are The Top Brokerage Firms For Options Trading

    Trading options? Here is the list of the best brokerage firms for options trading, with features, functionality, and brokerage rates.

You May Also Like

Hot Definitions
  1. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  2. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  3. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  4. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  5. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
Trading Center