What is a golden parachute?
A golden parachute is a sizable benefits package offered to the top brass at a large corporation. These packages include a list of monetary benefits, which can include cash, stock options, company shares, insurance benefits, continued enrollment in pension plans, immediate vesting in things like 401(k) retirement plans, compensation for legal fees, and other perks.
The first golden parachute was put in place in 1961 to protect Charles C. Tillinghast, Jr., president and CEO of Trans World Airlines. The company was trying to free itself of Howard Hughes' leadership, but if he regained control, the golden parachute would provide Tillinghast with significant compensation.