What is the issue at the core of the principal/agent conflict? Are stock options a good form of…

What is the issue at the core of the principal/agent
conflict? Are stock options a good form of employee or manager compensation? Do
they begin to heal the inherent conflict that exists between principals and
agents?

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Refer to the Corporate Governance issue earlier in this
chapter; what is the role of the board of directors in setting the level of
executive compensation?

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