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Why put a golden parachute in your employment contract?

Taking an executive role in a company can require long hours and a lot of hard work. However, it can also be incredibly rewarding. You can earn well and you have a lot of influence over the company’s success.

Yet what if you do so well in building up the business that another company wants to buy it, or merge with it? Mergers and acquisitions usually mean the loss of some jobs and there is no way of guaranteeing that won’t include yours. This is where a golden parachute can help.

A golden parachute will give you a soft landing

If you insert a golden parachute clause into your contract, it can provide you with sufficient funds to make losing your job due to a merger or acquisition less damaging for you. You won’t be left needing to quickly find another job to keep the money coming in. Rather, you will receive a hefty sum that will allow you to take your time to look around and decide what to do next.

Golden parachutes can be a lump sum payment, stocks in the company or a combination of the two. They can also include continued health insurance and other benefits. It all depends on what you negotiate.

Of course, not everyone is in favor of these measures, so you may have to fight to get the deal you want. Taking legal guidance can strengthen your position and ensure everything is properly documented in your employment contract.