Golden Handshake vs Golden Handcuffs

Golden Handshake
Many people is quite familiar with the term “golden handshake” and many may have even encounter once or twice in their career history. Feeling was not good.

What is Golden Handshake?
According to Wikipedia, Golden handshake is a clause in an executive employment contract that provides the executive with a significant severance package in the case that the executive loses his or her job through firing, restructuring, or even scheduled retirement.

Typically, “golden handshakes” are offered to high-ranking executives by major corporations and may entail a substantial value.

Many people are disheartened to leave the organization. Not they want to leave the organization, instead it could because of the bad economy that affects the organization or the organization had made a wrong investment that caused the company to escalate to the other side of the hill.

Golden Handcuffs
Golden handcuffs objective is to encourage highly compensated employees to remain within a company instead of allowing him to move from company to company. The benefit and packages normally are extremely tempting as they usually are of great value compared to the employee’s annual salary.

Golden handcuffs are frequently used for jobs that require rare and specialized skills or in a “tight labor market”, where jobs are more common than workers.

Golden handcuffs constitute one of several ways to stop companies’ key employees leaving, making it essentially financially unprofitable for them to walk away from their employers. Such deals are usually done with stock options.