golden handcuffs

plural noun

Definition of golden handcuffs

: special benefits offered to an employee as an inducement to continue service

golden handcuffs was our Word of the Day on 11/21/2014. Hear the podcast!

Recent Examples of golden handcuffs from the Web

His team is contractually bound to the sport until 2020 thanks to a hefty pair of golden handcuffs.

— jonathan m. gitlin, Ars Technica, "New hybrid rules for F1 have teams in a tizzy; Ferrari threatens to quit," 6 Nov. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'golden handcuffs.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Did You Know?

Chances are you've heard of a golden handshake, which is a particularly tempting severance agreement offered to an employee in an effort to induce the person to retire early. People started getting golden handshakes (by that name) around 1960; by 1976, English speakers had also coined the accompanying golden handcuffs to describe a situation in which someone is offered a special inducement to stay. The expression turns up often in quasi-literal uses, such as "slapped golden handcuffs on" or "a shiny new set of golden handcuffs."

First Known Use of golden handcuffs

1976

in the meaning defined above

See Words from the same year

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Financial Definition of GOLDEN HANDCUFFS

golden handcuffs

plural noun

What It Is

Golden handcuffs are financial incentives designed to keep talented employees from leaving a company.

How It Works

Golden handcuffs may come in the form of lucrative commissions, generous bonuses, employee stock options, or other financial compensation; all provided to a talented employee as an incentive to keep them from moving out of the company.

For example, let's assume that John is the CFO of Company XYZ. John is very talented and capable, and Company XYZ knows that it would be very time-consuming and expensive to hire a new CFO if John were to leave.

The labor market for CFOs is very tight at the moment, meaning that John has a lot of options at other companies and is probably getting some interest from other firms.

To keep John at Company XYZ, the board of directors decides to give him some golden handcuffs: a $50,000 stay bonus that he must return if he leaves the company in the next 18 months. John is actually free to leave at any time, but if he does, he won't get to keep the $50,000.

Why It Matters

Golden handcuffs are a tactic to retain talent. They are more common in tight labor markets or for jobs requiring highly specialized skills. However, they are also very expensive, and although they can be less expensive than the cost to replace a particular employee, golden handcuffs often receive scrutiny from shareholders and directors.

Source: Investing Answers