The departure of a number of high profile executives last year brought the issue of golden parachutes – lucrative benefits given to departing employees – back into the spotlight as yet another controversial form of executive compensation.  Supporters of this form of compensation argue that it helps protect employees from arbitrary dismissal, discourages takeover attempts, and aids in executive retention efforts.  Golden parachute critics, however, point out that these benefits are often guaranteed in executive contracts without regard for the reason for the employee’s departure, essentially create a reward for poor performance, compensate already over-compensated executives, and don’t serve as deterrence for unsolicited takeovers at all.  Shareholders are speaking out against these in proxy proposals this season, and even the government took aim when it limited golden parachute compensation through the Emergency Economic Stabilization Act (EESA).  We at Westlaw Business recognize that golden parachutes are a hot proxy topic this year and have gathered some materials to assist you as you prepare for this year’s proxy season.

Published: March 17, 2009