How can the vexing problem of fair executive compensation be resolved? (Case Study Paper)

How can the vexing problem of fair executive compensation be resolved? (Case Study Paper)

Introduction

The innovation that is the modern corporation has been so successful because, among other things, it allows people to become "owners" of businesses without incurring the personal liability associated with being a partner. This limited liability encourages the efficient allocation of capital, which in turn gives rise to an "agency problem": How can we ensure that the ultimate recipients of all this efficiently allocated capital (i.e., other people's money) will employ it with a ...