This new book examines the relationship between agency theory and executive pay. It argues that
while Jensen and Meckling (1976) were right in their analysis of the agency problem in public
corporations they were wrong about the proposed solutions. Drawing on ideas from economics
psychology sociology and the philosophy of science the author explains how standard agency
theory has contributed to the problem of executive pay rather than solved it. The book explores
why companies should be regarded as real entities not legal fictions how executive pay in
public corporations can be conceptualised as a collective action problem and how behavioral
science can help in the design of optimal incentive arrangements. An insightful and
revolutionary read for those researching corporate governance HRM and organisation theory
this useful book offers potential solutions to some of the problems with executive pay and the
standard model of agency.
