A "golden parachute" is a contract in which an executive agrees to pay his or her corporation a specified fee if the executive decides to "bail out" in the middle of sensitive negotiations.

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A golden parachute is actually a clause in an executive's employment contract that provides significant financial benefits in the event that the executive is terminated or forced out of their position due to a merger or acquisition. It does not apply to a situation where an executive decides to leave on their own during negotiations.

A "Golden Parachute" Is a Contract in Which an Executive