Generous compensation plans paid to a ﬁrm's top management in the event of a takeover are called ____________.

Question

Quizplus · Accepted Answer

Golden parachutes are compensation agreements that provide generous benefits to top executives if the company is taken over. These benefits typically include severance payments, stock options, and other incentives designed to make it more attractive for executives to stay with the company during a takeover. Poison puts are provisions in bond contracts that give bondholders the right to demand repayment if certain events occur, such as a change in ownership. White knights are potential buyers who are seen as more favorable than the existing potential buyer. Shark repellents are measures designed to make a company less attractive to hostile acquirers. Bear hugs are friendly takeover bids that are designed to be appealing to the target company's management.

Generous Compensation Plans Paid to a ﬁRm's Top Management in the Event