Golden handcuffs are a system of financial incentives designed to keep an employee from leaving the company. These can include employee stock options which will not vest for several years but are more often contractual obligations to give back lucrative bonuses or other compensation if the employee leaves for another company. An employee stock option is a Call option on the common stock of a company issued as a form of non-cash compensation.
Golden handcuffs are a response by the companies in industries where it is common for highly compensated employees to frequently move from one firm to another, often before the company feels that it has earned a return on the investment in the employee.
Some US courts have held such plans to violate the Employee Retirement Income Security Act (ERISA) by failing to vest benefits. The Employee Retirement Income Security Act of 1974 ( ERISA) ( is an American federal statute that establishes minimum standards for pension plans in private
- Serio v. Wachovia 2007 Lexis 63341 (D. N. J. 2007)
- Holzer v. Prudential 458 F. Supp. 2d 587 (N. D. Ill. 2006) 2006 Lexis 73049
- McKinsey v. Sentry 986 F. 2d 401 (10th Cir. 1993) 1993 Lexis 2865
- Holansky v. Prudential 2004 Lexis 1419 (N. D. Ill. 2004)
In television, if a host has signed the 'golden handcuffs' deal with the network, it means they cannot appear on any other rival channel. A great example of this would be British television hosts Ant & Dec. Ant & Dec are a British duo of Light entertainment television presenters consisting of Novocastrians (the colloquial terminology for this is "
More broadly, the term can also refer to any kind of situation in which a generous salary is used to keep an important employee from looking for a more desirable but less certain position.
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