Silver Parachute

A clause in a hiring contract describing a relatively lucrative severance package once an employee leaves a company, especially after a merger or acquisition. Such a package often includes cash and stock options, as well equity in the company. A silver parachute is not normally as large as a golden parachute, but a greater number of employees are eligible for one.

silver parachute

An agreement for employee severance benefits in the event control of the firm changes hands. A silver parachute is less lucrative and is extended to more employees than is a golden parachute.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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Even less common than gold or silver parachutes are tin parachutes--severance plans that cover all of the employees of a company in the event it undergoes a change in control.

Minimize parachute penalties

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