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ROLE OF ESOP IN AGENCY ISSUE
 
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It is also known asPrincipal-AgentRelationship.
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 Shareholders-the owners of thecompanyare the principals andmanagers are theagents.
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Divorce between ownership andmanagement
 
HOW TO RESOLVE THIS
a)Market
They are the institutional investors or lifeinsurance company who puts pressure onmanagement to perform well as they canexercise their voting rights to replace theunderperforming managers.
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