Not so long ago, when companies merged or otherwise changed ownership, executives knew that they were likely to be associated with the old regime. Now on the chopping block, their separation from employment with their companies was cushioned by the severance agreements they signed.
These substantial packages substantially eased the former executives’ separation from the corporation because golden parachutes are severance agreements designed specifically for top executives. They detail the perks and compensation they will receive if their employment ends due to a merger, acquisition or other change in company control.
A study in contrasts
But while these safety nets can include cash payouts, stock options, extended benefits and sometimes even bonuses or pension boosts, they are far from the bare-bones severance agreements most workers are offered when their employment ends.
Golden parachutes still exist, but only for company execs. That means that most workers facing layoffs due to mergers and acquisitions may still need to fight for a severance agreement that addresses their concerns.
Ultimately, golden parachutes are a reminder that not all severance agreements are created equal. Whether you’re negotiating your own exit or simply trying to understand the landscape, it’s worth knowing how these high-flying deals work and the picture they paint of corporate values.
If you don’t ask, you won’t receive
Workers may go into their exit interviews expecting a severance offer, only to be met with nothing. But they could possibly extract a small measure of goodwill from their former company by specifically requesting that something be included in their severance package.
What that could be depends on the employee’s needs and the company’s whims. By coordinating with a business law insider before your severance agreement is signed, you could leave with a small cushion (if not a golden parachute).