Golden handcuffs agreement is usually meant for prestigious employees or executive members of a company. The large payouts associated with these arrangements can trigger substantial tax liabilities for the recipients, so it can make sense to create deferred compensation arrangements that delay the nRead more
Golden handcuffs agreement is usually meant for prestigious employees or executive members of a company. The large payouts associated with these arrangements can trigger substantial tax liabilities for the recipients, so it can make sense to create deferred compensation arrangements that delay the need for tax payments. It would also depend on what kind of incentives are provided, some may include taxes and some may not. For instance, phantom stock may be viewed as one example of a golden handcuffs arrangement and there is generally no taxable income for the holders of phantom shares until the employee redeems the phantom shares at a later date.
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Manushree Mishra
To first understand what a golden handcuffs is, it is a phrase which refers to, "financial allurements and benefits that have the objective to encourage highly compensated employees to remain within a company or organization instead of moving from company to company." It is introduced because theseRead more
To first understand what a golden handcuffs is, it is a phrase which refers to, “financial allurements and benefits that have the objective to encourage highly compensated employees to remain within a company or organization instead of moving from company to company.” It is introduced because these days it is a tough job for a company to retain their skilled and talented employees and in order to do that they have established golden handcuffs agreement. Speaking of which, a golden handcuff agreement is a contractual compulsion between an organization and employee often meant for top-level executives or highly skilled individuals. These incentives are provided so that they will encourage that individual to stay with the company. Such employees are in high demand and are likely to leave if they receive a better offer from another organization. The incentives are given on the condition that the employee must give up them if she decides to leave.
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