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Golden handcuffs are a system of financial incentives designed to keep an employee from leaving the company. These can include employee stock options that 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.
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.
- 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 hosts have signed the "golden handcuffs" deal with the network, it means that they cannot appear on any other rival channel because of a non-compete clause. An example of this would be British television hosts Ant & Dec.
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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