This video will explain the meaning of a golden parachute. A golden parachute is a lucrative severance package inked into the contracts of top executives promising substantial benefits if the company is taken over by another firm. Golden parachutes may include ongoing insurance and pension benefits, as well as large bonuses and stock compensation. The use of golden parachutes is controversial, with detractors arguing that executives are already well-compensated and should not be rewarded for being terminated. To learn more about how golden parachutes work, watch this video.