In defending against hostile takeover attempts, a company will include provisions in the employment contracts of key executives that provide them with sizable compensation if the firm is taken over. This is called the ________ strategy.
A) shark repellent
B) silver parachute
C) greenmail
D) golden parachute

Question

Quizplus · Accepted Answer

The scenario described refers to the use of Golden Parachutes, which offer executives compensation packages in the event of a takeover that results in their termination. Shark repellent refers to provisions in a company's charter that make it more difficult for an outsider to gain control of the company. Silver Parachutes are similar to Golden Parachutes but offer less generous compensation packages. Greenmail is a tactic where an outside investor buys a significant stake in a company and then pressures the firm to buy back the shares at a premium, effectively paying the investor to go away.

In Defending Against Hostile Takeover Attempts, a Company Will Include