An advantage of severance packages is that they may encourage top-level managers to accept takeover bids that are attractive to shareholders.

Question

Quizplus · Accepted Answer

Severance packages can provide financial security to top-level managers if they lose their jobs during a takeover, which may make them more willing to accept the bid and not resist the acquisition to protect their own positions. This can benefit shareholders who are seeking to maximize value from the transaction.

An Advantage of Severance Packages Is That They May Encourage