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.