Greenmail
Categories: Entrepreneur, Banking
It's kinda blackmail, only with green (cash).
A corporate raider wants to go hostile and buy a company for, say, a 20% premium over its trading price. Enough shareholders are frustrated with the company and the board for this stock that used to trade for $100 a share and is now $20 a share, and the raider offers $24. They think he's stealing it for a cheap price, and just want another year to turn things around, so they pay him to go away.
That is, they come up with a semi-bogus "consulting contract" for like a hundred million dollars. And that's his greenmail.
How is it blackmail turned green? Well, these guys are evil geniuses, and they know when companies are vulenerable to being blackmailed this way, so they proactively hunt for deals when they can be simply paid to go away. Very high margin business when it works.