Golden Handcuff

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Golden handcuffs are a collection of financial incentives offered by employers to existing employees as a means of holding onto key employees and increasing employee retention rates.

Golden handcuffs are common in industries where highly-compensated employees have valuable, proprietary strategic information.

Examples of golden handcuffs include employee stock options that do not vest until the employee has been with the company for several years, and contractual agreements that stipulate certain bonuses or other forms of compensation must be returned to the company if the employee leaves before a certain date.

Not to be confused with golden handshakes, which are financial payments awarded to employees on leaving a company due to redundancy, restructuring or scheduled early retirement.

Links

Corporate Finance Institute® Golden Handcuffs