golden parachute

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golden parachute,

a contract given to top executives of a corporation to provide benefits in case of job loss due to a takeover by another firm or a merger. The unusually generous benefits may include substantial severance pay, a one-time bonus payment when employment ends, or stock options.
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We fail to see how the board of directors could possibly justify these golden parachutes as representing the best interests of Coalcorp or its shareholders"
The Say on Golden Parachute White Paper is available at http://pearlmeyer.
CUNA Senior Vice President and Deputy General Counsel Mary Mitchell Dunn wrote that the board should permit credit unions to make golden parachute payments to former executives of insolvent or CAMEL 4 or 5 credit unions if the executive "was not involved in causing the loss.
The Allied board only exacerbated shareholder concerns regarding the terms, process and motives involved in the proposed merger by simultaneously approving the merger agreement and amending employment agreements for top executives in ways that appear to have materially increased golden parachute payouts for these executives.
While a few of the law firm's clients have been audited in the past on deferred compensation and golden parachutes, there has been "very little history" of the IRS actively auditing these areas, Fuller adds, describing the situation as something akin to "benign neglect.
For an executive, a golden parachute is a very good severance package.
Today, golden parachutes can encompass a wide variety of benefits, including not just extended salaries and cash payouts but also early vesting of stock options, bonuses, pensions and other benefits such as health and life insurance policies, says Marianne Heard, CPA, a manager at American Express Tax and Business Services.
I think compensation committees should adopt a convention that puts a ceiling on pay packages, somewhat like what has been done with golden parachutes.
NCUA Attorney Pamela Yu said there are exemptions to the golden parachute rules to allow for previously agreed to deferred compensation plans and legitimate "nondiscriminatory" severance pay plans.
SRI funds are also more consistent in their support of popular 'plain vanilla' governance issues we examined (poison pills, expensing stock options, golden parachutes, and declassifying the board) -- totaling 90 percent support for these four issues, opposed to 72 percent support by 'conventional' funds.
Golden parachutes, however, have significant tax implications for both the company and the executive.
Wally questioned whether he should mention golden parachutes if no one else did.