Who knows? It’s part of the game. If you play the game, it’s part of the game. No big deal, right? A “golden parachute” is a leveraged agreement, whether in politics or in business, relieving an executive of position, specifying that the person being removed will receive certain significant benefits if their position is terminated. These may include cash bonuses, positions, pardons, or other benefits. Most definitions of “golden parachute” specify the employment termination is as a result of a takeover for money or power. In politics, the terms, or existence, of the golden parachute is seldom revealed, and is often combined with “skeletons in the closet” threats when there is not a willing compliance.
The first use of the term “golden parachute” is credited to a 1961 attempt by creditors to oust Howard Hughes from control of Trans World Airlines, later purchased by American Airlines after TWA’s third bankruptcy.
Hughes claimed to be a six handicap, and played golf at LA courses including the Lakeside Golf Club, Bel Aire, and Wilshire Country Club. In his later years he was mentally impaired by every way of observing or measuring such things. Having lost control of his enterprises, continuing down the path of difficult mental health, he allegedly faked his own death.
The use of golden parachutes expanded greatly in the early 1980s in response to the large increase in the number of acquisitions and power transference. During the 1980s hostile takeover wave, the practice of using golden parachutes in an executive’s compensation package began to spread rapidly. By 1981, some 15% of the 250 largest U.S. corporations had golden parachutes in place.
