Word of the Day

: November 12, 2010

golden parachute

noun GOHL-dun-PAIR-uh-shoot

What It Means

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

golden parachute in Context

When he was hired, John had insisted that his contract include a golden parachute to ensure that he could still live comfortably if his position was ever eliminated.

"So even the hired manager of a small community hospital system is entitled to a million dollar plus golden parachute when resigning in disgrace. This is another great example of the current perversity of the incentives given to hired health care managers." -- From an article in Health Care Renewal, September 10, 2010

Did You Know?

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?