TN 8 (11-93)

RS 01401.220 Golden Parachute Payments

A. DEFINITION

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 changes.

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.

B. POLICY

Golden parachute payments are wages.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0301401220
RS 01401.220 - Golden Parachute Payments - 12/06/1993
Batch run: 01/27/2009
Rev:12/06/1993