Golden Handcuffs

Term Main definition
Golden Handcuffs

A financial incentive or award that, by its terms, encourages either founders, managers, officers, key employees or others to continue to serve the company until specified "vesting" dates or the achievement of agreed milestones. The name stems from the way golden handcuffs operate and their effect.  They generally operate by imposing adverse economic consequences upon an individual's voluntary termination of service. A person who is bound by golden handcuffs is free to quit, but he or she will lose a significant reward that could only be received if the person performs further services or achieves further goals.