Golden-parachute arrangement

The contract may require both a change of control and a qualifying termination, or use other defined conditions. Benefits can include severance, accelerated awards or pension-related amounts, subject to the actual terms and applicable rules. Such arrangements can reduce managers’ personal resistance to a valuable sale, but can also increase acquisition costs, create conflicts or reward poor performance. Analyse incentives, approvals, disclosure and effects on shareholder value. It is not necessarily a takeover defence and does not grant every executive an automatic multiple of annual pay.