schmuck insurance

English

Etymology

From schmuck (“fool, idiot”) +‎ insurance.

Noun

schmuck insurance (uncountable)

1. (business, informal) The situation where an owner sells a company but retains a portion in case the price appreciates in the future.
   • 2023 April 5, Byrne Hobart, Capital Gains‎^[1]:

     The solution? Instead of selling 100% of the business, the seller either keeps a stake, or keeps an option to buy back part of it later. This solution, which was apparently popularized by Time Warner CEO Dick Parsons in the early 2000s ($, WSJ), is known as "schmuck insurance”.

   • 2011 June 13, Shira Ovide, “The Benefits of Deal 'Schmuck Insurance'”, in The Wall Street Journal‎^[2]:

     In Wall Street parlance this is known as "schmuck insurance," a reference to the rather vulgar Yiddish word that has come to mean the equivalent of "idiot."

Further reading

• Schmuck Insurance (Capital Gains)