Golden Life Jacket
An exceptional compensation package offered by the acquiring company to the top executives of the company being bought. The offer is meant to keep those executives interested in retaining their positions. Investopedia Says:
A form of sweetheart deal, golden life jacket benefits include in-the-money options and additional large bonuses. The options offered may not be in the best interests of shareholders, as the executive holding the options could be unaffected by large swings in share prices.
Furthermore, there is less incentive to make the best possible decisions, which could impact its share price, because the executives often receive the benefits irregardless of how well the company performs. Related Terms:
Fat Cat
Golden Parachute
Merger
Sweetheart Deal
Takeover |