Question 1
Discuss the concept of granting “Golden parachutes to executives”. Explain how this practice could be in line with shareholders’ best interests. Do you see how this practice could possibly be taken advantage of by the executives?
Upon employment, senior executives are entitled to a certain payment either in monetary value, or in equity should their contract be terminated ‘without cause’ before the end of their contractual tenure. This payment is normally referred to as a “Golden Parachute.” Golden parachutes have often raised concerns of abuse and claims that the management elite of the company could be taking advantage of ...