“THE MORDERN CORPORATION†A THEORETICAL REVIEW OF THE MODERN CORPORATION IN ZIMBABWE AND THE USE OF SHARE OPTION SCHEMES AS A WAY OF REDUCING THE AGENCY PROBLEM IN STOCKMARKET LISTED COMPANIES
Journal Title: European Journal of Business and Social Sciences - Year 2014, Vol 3, Issue 3
Abstract
The main objective of this paper was to discuss the structure of the modern corporation, the nature of agency problem and the use of employee share option schemes in reducing the agency problem. The paper was done on a discussion basis, making use of the existing literature and existing evidence from media reports and company news. It was noted that design of executive compensation should align the interests of management with the shareholders and thereby induce managers to exert efforts to increase the firm’s value. An optimally designed scheme would seek to provide risk-averse managers with cost-effective incentives to exert effort and make value-maximizing decisions. The ideal exercise price with respect to such a scheme should depend on a various situations that are likely to vary from executive to executive, from company to company, from industry to industry, and from time to time.
Authors and Affiliations
Wilford Mawanza| Accounting and Finance Department, Lupane State University P.O Box AC 255, Ascot, Bulawayo, Zimbabwe Telephone +263973770 wilfordma@gmail.com
Keywords
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- EP ID EP10410
- DOI -
- Views 281
- Downloads 16
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