What Can Be Done to Deal with the Principal-Agent Problem

question 250

Multiple Choice

What can be done to deal with the principal-agent problem?

• A)threaten to liquidate the firm
• B)link top manager salaries to the profits of the firm or the price of the firm's stock
• C)have the CEO be a rotating position
• D)forbid managers from owning any company stock

---

Definitions:

Civil Rights

The rights of individuals to receive equal treatment (and to be free from unfair treatment or discrimination) in a number of settings.

Civil War Amendments

The 13th, 14th, and 15th amendments to the United States Constitution, adopted between 1865 and 1870, aimed at abolishing slavery and establishing civil and voting rights for freed slaves.

Major Accomplishments

Significant achievements or milestones completed by an individual, organization, or government, often reflecting a notable positive impact on society or a field.

Equality

The state of being equal, especially in status, rights, and opportunities, promoting fairness and justice within society.