It wasn't that long ago that pharmaceutical giant Merck (NYSE:MRK) was rumored to be looking to plug holes in its drug pipeline by buying out a competitor such as Schering-Plough (NYSE:SGP). Now that Merck has itself come down with a severe case of Vioxx-itis, however, the rumors are swinging the other way.

According to a MarketWatch (NASDAQ:MKTW) story published yesterday, industry analysts are hypothesizing that Merck may find itself an acquisition target of peers such as GlaxoSmithKline (NYSE:GSK) or Novartis (NYSE:NVS). Good news for Merck shareholders? Apparently not, as the company's stock price hardly budged (actually falling a bit) on the news. Ordinarily, when a company is rumored to be a takeover target, its stock price spikes in anticipation of a premium buyout offer. That was the case last week, when news spilled that education company DeVry (NYSE:DV) was in an unidentified acquirer's sights. And the week before as well, when the rumor broke that (NASDAQ:TSCM) was being stalked.

Not so with Merck, which remains a Motley Fool Income Investor recommendation. It's strange when you think about it, with Merck still 44% off its 52-week high. There would seem to be at least some room for an acquirer to buy this company at a premium to its price yet still at a discount to its intrinsic value. Perhaps the answer lies, then, in shareholder anger at the other news from yesterday: a filing that Merck made with the Securities and Exchange Commission, announcing that in anticipation of a possible hostile takeover, its executives are taking all possible measures to protect... themselves.

That's right, Merck shareholders. The guys who who've helped to drop the price of your shares from $90 to $28 in four short years, when faced with the consequences of their actions, have elected to knit themselves a set of first-class golden parachutes, while asking lower-level employees and shareholders to sit quietly and wait for events back in coach. Should Merck experience a "change in control," about 230 senior-level managers (less than one half of one percent of all Merck employees) will receive the right to resign "for good reason" and take a severance package ranging from one and a half times to three times their annual base salary and "target bonus amount." Plus pension benefits. Plus health benefits. Plus immediate vesting of stock options.

Pretty nice deal for the executives, and it should indeed achieve Merck's stated objective of "avoiding the distraction and loss of key management personnel." But as for inspiring the 63,000-odd parachuteless Merck employees, and for reassuring investors that Merck puts its shareholders' interests first, the plan leaves something to be desired.

For more on how Merck reached its present state, read:

Fool contributor Rich Smith owns no shares in any company mentioned in this article.