noun a sum of money paid to an employee as compensation in the event of a sudden termination or change in ownership of a company
In finance, a parachute payment refers to a large sum of money or benefits paid to executives or employees upon termination of employment, often as part of a severance package.
Parachute payments may be regulated by employment laws to ensure fairness and transparency in compensation practices.
Parachute payments are often subject to scrutiny in the context of corporate governance, as they can be seen as excessive or unnecessary compensation for executives.
Parachute payments may be triggered in the event of a merger or acquisition, as a way to protect executives' interests and ensure continuity of leadership.
Parachute payments are a key component of executive compensation packages, designed to incentivize and retain top talent.
In the field of finance, a parachute payment refers to a large sum of money or benefits that are given to a top executive or key employee if they are terminated from their position after a change in ownership or control of the company. Writers may encounter this term when researching executive compensation practices in corporations.
Psychologists may come across the term parachute payment when studying employee benefits and compensation packages. It is used to describe the substantial financial benefits provided to executives in the event of a merger, acquisition, or other significant corporate event that results in their termination.