Golden parachute payments are payments that corporations make to key executives, often
in excess of their usual compensation, when ownership or control of the corporation
EXAMPLE: A contract between a corporation and an executive provides that a payment will be
made to the executive if his employment is terminated during the next three years.
Eighteen months later, a change in ownership occurs. Six months thereafter, the executive's
employment is terminated and he receives the payment under the terms of the contract.