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Definition: a Golden Handshake is a form of employee benefits or executive compensation, wherein a large payment made by a company to a senior executive is done upon termination of employment (retirement) before his/her contract ends.
It is a clause in an executive employment contract that provides the executive with a lucrative severance package in the event of their termination. May include a continuation of salary, bonus and/or certain benefits and perquisites, pension allowance, as well as accelerated vesting of stock options.