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Golden parachute

• Provisions in the employment contracts of key executives that provide them with sizable compensation if the firm is taken over; deters hostile takeovers to the extent that the cash outflows required are large enough to make the takeover unattractive.

• Compensation paid to top-level management by a target firm if a takeover occurs.

 
 Embedded terms in definition
 Cash
Firm
Hostile takeover
Hostile
Takeover
Target firm

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