A “golden hello” is a package of incentives offered to lure an executive or employee from one company to another. It can be worth millions of dollars and is used to gain an advantage over competitors. A “golden handshake” is a contractual obligation to pay compensation if terminated, while a “golden boot” is an incentive for early retirement.
A “golden hello” refers to the monetary and other incentives offered to get an executive or employee to leave a position with one company and sign with another. The Golden Hello packages offered to high-profile executives can be worth millions of dollars. In 2010 Nokia paid over $6 million United States Dollars (USD) to lure former Microsoft executive Stephen Elop into a CEO position at Nokia.
Attracting successful executives away from rival firms is done with the belief that a competitor will lose an experienced executive and that the firm offering the incentive will gain an advantage by bringing that same experienced person on board. The Golden Salute is a testament to the belief that talented leadership in the boardroom is critical to achieving and maintaining a competitive edge. Firms can also oust workers with in-demand skills. This can happen whether or not these firms compete in the same market sector. The skills possessed by the individual can be worth much more than the incentives offered in the golden hello.
Incentives offered to employees and corporate officers who work for competitors are not unique to large companies. An individual may also be hired for the value of the relationships the person has established within an industry niche. For example, an automobile salesman may have a large list of past customers and will bring that accrued relationship capital to the new company. Firms in the financial industry often offer golden hellos, hoping to leverage the expertise of a financial expert with a proven track record in investment strategy or sales skills.
A gold offering is a relatively common occurrence in the tech industry. This is due to the rapidity of technological advances and stiff competition in bringing innovative products to market. Leveraging the expertise of an executive who has a proven track record in innovation can enable a business to capture new market share and stay ahead of the competition.
A golden handshake, or golden parachute as it is also called, refers to a company’s contractual obligation to pay executive or employee compensation if terminated. This is also referred to as a termination or layoff package. A golden handshake can be negotiated when the person is hired, or it can be determined through company policy. A golden boot refers to incentives offered to an employee who chooses to retire early and can be used to reduce the number of forced layoffs, when companies are forced to downsize.
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