SPHR · Question #13
During mergers and acquisitions (MandA), an executive is likely to be protected financially with a:
The correct answer is C. Golden parachute. A golden parachute is a contractual clause that provides executives with financial protection in case of termination following a change in control (e.g., MandA). It's designed to retain talent and protect decision-makers during uncertainty. Extract from HRCI-aligned HR…
Question
During mergers and acquisitions (MandA), an executive is likely to be protected financially with a:
Options
- ALeveraged buyout
- BDivestiture strategy
- CGolden parachute
- DStock option
How the community answered
(29 responses)- A3% (1)
- B3% (1)
- C93% (27)
Explanation
A golden parachute is a contractual clause that provides executives with financial protection in case of termination following a change in control (e.g., MandA). It's designed to retain talent and protect decision-makers during uncertainty. Extract from HRCI-aligned HR knowledge (Total Rewards): SPHR-level compensation strategy includes "designing executive packages that protect leaders and maintain stability during transition events." Golden parachutes are legally binding and used to prevent talent flight and protect continuity.
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