Elucidate several dimensions of the shareholder-principal

Reference no: EM1332243

The Principal-Agent Problem

Explain several dimensions of the shareholder-principal conflict with manager-agents known as the principal-agent problem. To mitigate agency problems between senior executives & shareholders, should the compensation committee of the board devote more to executive salary & bonus (cash compensation) or more to long-term incentives? Why? What role does each type of pay play in motivating managers?

Reference no: EM1332243

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