Golden Handcuffs

Meaning & Definition

Golden handcuffs are benefits or incentives (basically financial) given by the employer to motivate an employee to stay with them (and longer), e.g., bonuses, stock options, and stay compensation that the employee would not receive if they left the organization early.

Important features of Golden Handcuffs

• Retaining top talent, engaged, productive employees.
• Decreasing attrition and recruiting costs.
• Enhancing a long-term commitment to the company.
• Aligning employees’ goals with the organization’s success and growth.
• Improving retention and compensation strategies overall.

Compliance & Policy Considerations

• There are no statutory requirements that link to this term. 
• It should be defined in an employment contract and remuneration policy.
• It will also need to align with the income tax rules for bonuses, ESOPS, and deferred benefits set out in the Income Tax Act 1961.