Definition, Meaning & Synonyms

parachute payment

noun

/ˈpɛrəˌʃut ˈpeɪmənt/

Definition

A sudden large payment made to a person, especially in a financial context, usually as a form of compensation or incentive.

Examples

After the merger, the executives received substantial parachute payments to ease their transition.
The company offered parachute payments to keep key employees from leaving.

Meaning

Parachute payments are typically made to beneficiaries as a means of ensuring financial support in the event of a sudden change, such as a company’s sale or a downsize.