Golden Handcuffs | Meaning & Examples

Golden handcuffs is an idiom that describes a collection of employment benefits (e.g., stock options) that are designed to encourage valued employees to remain in their role. Unlike conventional benefits that persuade employees to stay, the handcuffs element refers to time limits or benefit forfeiture in the event of early departure (e.g., stock options becoming available after a qualifying period of time).

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Golden handcuffs definition

The phrase golden handcuffs is a relatively young neologism, with the earliest recorded usage in 1976. It is related to the earlier phrases golden handshake and golden parachute. Both of these phrases refer to generous compensation packages offered to very senior executives when joining a company. These offers are designed to attract the candidate to the role rather than encouraging them to stay.

The two parts of the phrase reflect contrasting ideas. Gold symbolizes wealth and success, and the handcuffs represent imprisonment and confinement. The idiom is, in many ways, an oxymoron, a self-contradictory phrase.

Unlike a golden handshake or parachute, golden handcuffs incentivize the employee to stay by punishing early departure. These often very lucrative deals are justified by the argument that struggling businesses have problems retaining staff who might be tempted to “jump ship.” The golden handcuffs persuade employees to stay around long enough to help bring about improvement.

Frequently asked questions about golden handcuffs

What is a golden handshake?

A golden handshake is a set of employment perks designed to entice top executives to a role. It might include a cash bonus, share options, a relocation package, or other allowances. It is sometimes called a golden parachute.

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What is a golden parachute?

A golden parachute is a collection of attractive benefits offered to top executives to encourage them to take on a new role. These perks can include things like a cash bonus, stock options, help with relocation, and various other allowances. 

The term “golden parachute” specifically emphasizes the idea of a secure and financially comfortable exit for an executive, often in the context of a merger or acquisition, though it can broadly refer to the appealing package itself.

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