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

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A golden parachute is indeed a contract provision that gives executives significant benefits if they are ousted from the company, often in the context of a merger or takeover, to provide financial security and discourage hostile takeovers by making it expensive to remove the current management.

A Golden Parachute Is a Prearranged Contract with Managers Specifying