Abstract
Where corporate ownership and control are separated, the actions of employees and managers are not completely observable by shareholders, because it is virtually Impossible for a diverse group of shareholders (the principals), to monitor the behaviour of employees and managers (the agents), Conflicts of interest between principals and agents may thus arise. Agency Theory, which deals with the analysis of the control of incentive conflicts in contractual relations, provides arguments both for and against the notion that the separation of ownership and control in organisations has important implications for the manner in which companies are operated. This study investigates the effect of alternate corporate control structures on compensation levels in a South African setting, and interprets the results in the context of the agency issue.
Additional information
Notes on contributors
T. Cohen
Trevor Cohen is a Partner at H. Tarley and Company, Chartered Accountants
E. Uliana
Enrico Uliana is an Associate Professor in the Department of Accounting at the University of Cape Town