The term "golden parachute" refers to
A) a clause requiring that huge dividend payments be made upon takeover.
B) pay given to executives fired because of a takeover.
C) financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it.
D) managers of a firm in a hostile takeover approaching a third party about making the acquisition.

Question

Quizplus · Accepted Answer

A golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will be paid a significant severance package.

The Term "Golden Parachute" Refers to