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Task 2:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Review the discussion in the lesson regarding the financial crisis. Discuss each of the following points. Use sources from the ITT Tech Virtual Library to add to your answer.

Define the principal agent problem.

Do corporate managers always act in the best interest of shareholders? Explain.

Research and present one CEO (Chief Executive Officer) pay package. Does this CEO earn more money if the company performs well? What penalty does the CEO receive if the company does not perform well?

Does the pay package of the CEO you presented add to or reduce the principal agent problem? Explain.

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Explanation / Answer

ANSWER

the principal

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