Listen to a Business English Dialogue about Golden handshake
Martin: Hi Eliana, have you heard about golden handshakes in business and finance?
Eliana: Yes, Martin. A golden handshake refers to a significant severance package or retirement benefit provided to an executive or employee upon leaving a company, often as a reward for long service or to incentivize their departure under certain circumstances.
Martin: That’s correct. Golden handshakes can include cash payments, stock options, continued healthcare benefits, or other perks, depending on the terms of the agreement. Do you know why companies offer golden handshakes?
Eliana: Companies offer golden handshakes to attract and retain top talent, incentivize executives to achieve performance targets, and provide financial security to departing employees, while also managing transitions in leadership or restructuring efforts.
Martin: Exactly. Golden handshakes are often part of executive compensation packages and can be used strategically to address succession planning or mitigate potential legal disputes. How do you think golden handshakes impact shareholders and stakeholders?
Eliana: Golden handshakes can sometimes be controversial, as they may be perceived as excessive or undeserved, leading to criticism from shareholders and stakeholders who believe executives are being rewarded unfairly, especially in cases of poor performance or corporate misconduct.
Martin: That’s true. Shareholders may view golden handshakes as a misuse of company resources or a failure of corporate governance if they’re not aligned with the company’s performance or shareholder interests. How do you think golden handshakes are negotiated?
Eliana: Golden handshakes are typically negotiated as part of employment contracts or severance agreements between executives and the company’s board of directors or compensation committee, with terms and conditions tailored to the individual’s role, tenure, and contributions to the organization.
Martin: Correct. Negotiations may involve considerations such as the executive’s salary, bonuses, equity grants, performance targets, and termination clauses. How do you think golden handshakes are perceived by the public?
Eliana: Golden handshakes can attract public scrutiny and media attention, especially if they’re perceived as excessive or out of touch with prevailing social and economic conditions, leading to reputational damage for the company and its executives.
Martin: That’s right. Public perception of golden handshakes can impact consumer attitudes, investor confidence, and corporate image, influencing stakeholders’ trust and loyalty. Thanks for the insightful conversation, Eliana.