What are golden parachutes?

Golden parachutes refer to lucrative benefits that executives receive in the event of a company takeover or merger. Typically, these benefits include substantial severance pay, stock options, and other financial incentives designed to protect high-level executives from the financial implications of losing their jobs due to such corporate changes. The rationale behind golden parachutes is to attract and retain top talent, ensuring that executives are not discouraged from taking risks or pursuing growth opportunities out of fear of personal financial loss in the case of a takeover.

This practice is primarily aimed at executives rather than general employees, setting it apart from benefits associated with scenarios like employee health benefits or severance packages for employees terminated for cause. Thus, golden parachutes are specifically structured to provide significant financial security to executives, making choice C the correct description of what golden parachutes are.