Golden handcuffs are compensation arrangements designed to retain key employees by making valuable benefits contingent on continued service. Vehicles include nonqualified deferred compensation,restricted stock or units, stay bonuses, split-dollar, and 162 executive-bonus policies withvesting or forfeiture provisions. The economic value accrues over time and is lost (in whole or part) if the employee departs early. Properly structured golden handcuffs align incentives with business goals, provide meaningful wealth-building, and can be paired with life insurance to finance benefits or mitigate the impact of premature death or disability.

HR and advisors blend NQDC, restricted equity, split-dollar, or 162 policies with vesting schedules. They document forfeiture triggers and performance conditions, then pair key-person coverage so the company can fulfill commitments if a principal dies or becomes disabled.