golden handcuffs was our Word of the Day on 11/21/2014. Hear the podcast!
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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
Financial Definition of GOLDEN HANDCUFFS
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.
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.
GOLDEN HANDCUFFS Defined for English Language Learners
Definition of golden handcuffs for English Language Learners
: the salary and benefits that stop a highly paid employee from choosing to leave a job
Seen and Heard
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