golden parachute

noun

: a generous severance agreement for a corporate executive in the event of a sudden dismissal (as because of a merger)

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The Gilded History of Golden Parachute

In 1981 an employee of a major company undergoing a corporate merger referred cynically to the huge severance packages given ejected executives as "golden parachutes." It isn't clear whether the employee actually coined the term, but it is well documented that both "golden" and "parachute" were already part of corporate parlance by that time. Since the 1960s, the business world had been using "golden handshake" for a compensatory package accompanying a termination or forced retirement. The image of the parachute, evoking a comfortable and painless landing, may have been inspired by the popular book about career change by Richard Bolles, titled What Color Is Your Parachute?

Examples of golden parachute in a Sentence

Recent Examples on the Web Just before Thanksgiving, before the Zaslav meeting, before any rumors of a Skydance dance, Paramount stock rallied thanks to a golden parachute. Alex Weprin, The Hollywood Reporter, 4 Jan. 2024 Executives at Paramount, including CEO Bob Bakish, reportedly renegotiated their compensation packages to include a golden parachute clause in case of a change of ownership. Paolo Confino, Fortune, 11 Dec. 2023 Some golden parachutes are reasonable, but plenty have been criticized, going to CEOs who only worked a short period or who performed poorly. The Motley Fool, Dallas News, 10 Sep. 2023 The Fool Responds: A golden parachute guarantees a top executive a very generous payout should they be forced to leave the company (perhaps due to a merger). The Motley Fool, Dallas News, 10 Sep. 2023 Right now, Activision Blizzard is in the midst of a sale to Microsoft — a sale that was thought might save the company from its sordid present and Kotick himself via golden parachute. Ash Parrish, The Verge, 1 June 2023 Perhaps, the sweet spot for providing versus expending should widen just a bit, and golden parachutes for today’s CEOs could stand to shrink a little. Shakeel Ahmed, Forbes, 19 Apr. 2023 The former high-flying magazine editor, who received a golden parachute from Vogue publisher Condé Nast, now writes a popular newsletter rivaling Gwyneth Paltrow’s Goop. Jp Mangalindan, Peoplemag, 6 July 2023 There has long been debate among shareholders over golden parachute agreements, which serve both as a way to appease high-level executives who are being fired after a merger and also as a way to discourage hostile takeover bids, by requiring buyers to dole out generous severance packages. Shira Ovide, Washington Post, 29 Oct. 2022

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'golden parachute.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

First Known Use

1981, in the meaning defined above

Time Traveler
The first known use of golden parachute was in 1981

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Cite this Entry

“Golden parachute.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/golden%20parachute. Accessed 21 May. 2024.

Legal Definition

golden parachute

noun
gold·​en para·​chute
: an agreement providing for generous compensation to an executive upon dismissal
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