Say on Golden Parachute: A Look at Say on Pay’s Lesser-Known CousinZoom inDownload PDF
Are golden parachutes delivering what they promise?
Golden parachutes became common in the hostile takeover years of the 1980s, when executives worried about losing their jobs to corporate raiders. The golden parachutes provided executives with lump sum payments, immediate vesting of equity awards and continued participation in benefits following a change in control.
Media reports and debacles about failed financial service companies in the 2000s raised public ire over these arrangements. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 advanced a mandate for shareholders to review these parachute arrangements prior to completion of a corporate merger or change in control. The mandate became known as say on golden parachutes and complemented say on pay, a mandate for routine shareholder pay program reviews. Both mandates are advisory and nonbinding.
Download the entire article, “Say on Golden Parachute,” by Ross Brondfield and Hanna Hoopingarner, originally published in the November 2015 issue of Workspan magazine.