A conflict that exists in an organization between those who are in positions of control or trust (agents) and those whose interests are to be served (principals or stakeholders) in which actions taken by the agents instead serve their own interests. Such conflicts tend to arise more frequently in organizations that lack sufficient or effective material, moral and coercive incentives for agents to act otherwise. Also called principal-agent problem.
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alleviate the agency problem in publicly traded companies. ... views, however, on how the agency problem and executive compensation are linked.
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