The "Golden Hello"

The New York Times reports today on the "Golden Hello" -- the compensation a new employer may pay to an executive to induce the executive to change jobs. As the Times explains:

[T]hese multimillion-dollar payments and perks are used to draw in not only chief executives, but virtually every member of the executive suite. If “golden parachutes” — rich exit packages of extra cash, stock or retirement benefits — are needed at times to kick out chief executives, golden hellos are increasingly needed to get them in the door.

Salary matching, signing bonuses and stock options are among the standard array of compensation arrangements used to convince executives to move to a new employer and make them "whole" for the losses they incurred by leaving the old employer. Executives have also been able to negotiate pension benefits based on years of service at the old employer. According to the article, however, there are new twists on the Golden Hello.

Some executives are receiving "price protection" on houses they must sell to relocate and on stock they own in the company they are leaving. For example Hewlett-Packard agreed to reimburse its new CEO for losses if NCR’s stock fell by any amount up to 20 percent within 90 days of his departure from NCR.

Naturally, the article focuses on chief executives at major companies but the principle of the "Golden Hello" is something to keep in mind as you consider a new position.

Etymological Note on the "Golden Hello"

A Google search of the term "Golden Hello" shows that term may be new to the United States. Most of the hits are for articles and websites from the UK. Feel free to email me with your alternatives.