Can they not be paid a (very substantial) retention bonus? I’ve know people at startups that had no equity that were paid retention bonuses during acquisitions. Is a CEO different here?
Yes, but not too substantial, or the shareholders have grounds to sue based on what I said above.
A similar (but even more complicated) case is currently going on over at Sculptor Capital Management, where former management is suing current management because they have chosen to go with a "worse" acquisition deal that would let current management stay on-board. This is despite shareholder approval to the "worse" deal. https://www.pionline.com/hedge-funds/ex-sculptor-executives-...
In fact, to prevent this situation is exactly why golden parachutes exist.
It's also totally unproportional compared to what Sam would've gotten if he owned equity.
