golden handshake: meaning, definition, pronunciation and examples

While both are lucrative exit packages, a 'golden handshake' is typically associated with retirement or agreed departure, often in the UK. A 'golden parachute' is a US term specifically for clauses in an executive's contract guaranteeing a large payout if they lose their job due to a merger, takeover, or change in control.

Typically, it is associated with senior executives, directors, or long-serving high-level employees. It is discretionary and goes beyond standard contractual or statutory severance entitlements, so it is rarely offered to junior staff.

Financially, yes. However, it may imply that the departure was not entirely voluntary or that the company wanted to avoid a messy dismissal. In public perception, it can sometimes be seen negatively, especially if the company is laying off other staff or underperforming.

Yes, they are generally subject to income tax and national insurance contributions in the UK, and to income tax in the US, often at the recipient's highest marginal rate. The specific tax treatment can depend on the structure of the payment and local laws.

A substantial sum of money or other financial benefits given to an employee upon leaving a company, especially at the end of their career or when made redundant.

Golden handshake is usually business/formal, journalistic in register.

Golden handshake: in British English it is pronounced /ˌɡəʊldən ˈhændʃeɪk/, and in American English it is pronounced /ˌɡoʊldən ˈhændʃeɪk/. Tap the audio buttons above to hear it.