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What is a golden handshake?

Golden Handshake

A golden handshake is an agreement whereby an employee receives monetary compensation and/or stock options as a result of the termination of their employment. Originated in Britain in the mid-1960s, golden handshakes are typically only offered to high-ranking executives by major corporations.

Where have you heard about a golden handshake?

Golden handshakes have been on the go for decades. One of the most famous examples is when F. Ross Johnson was paid over $53 million by R.J. Reynolds Tobacco-Nabisco in 1998 as part of his severance compensation package.

What you need to know about a golden handshake.

Golden handshakes are offered to employees through loss of employment, whether that be due to layoffs, firing or retirement with common methods of payments including cash and stock options. In the official golden handshake agreement, it usually states that the employee is not allowed to open a competing business within a certain period of time. Commonly occurring after mergers, takeovers and buyouts. Golden handshakes do not come without controversy since they often include promises not to sue the company or work for a competitor.

Find out more about a golden handshake.

Explore terms similar to golden handshake by reading our definition of golden parachute and golden handcuffs.

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