It has emerged despite all the measures (i.e., new regulations and additional corporate governance mechanisms) aimed at addressing such problems?
Beyond such negative controlling measures, a more positive empowering approach based on ethics may also be necessary.
We conclude that while executive compensation schemes (e.g., stock options) were originally intended to help remedy the agency problem by tying together the interests of the executives and shareholders, these schemes may have actually become “part of the problem,” and that the solution ultimately depends upon whether directors and executives accept that all of their actions must be based on a set of core ethical values.
"This month is the ten-year anniversary of the "quant crisis" or "quant quake" - that one week period in August 2007 when quantitative equity strategies like factor investing and statistical arbitrage suffered very large losses and then, in the next few weeks, made an almost full recovery.
Given the current popularity of factor investing it seems a good time to review what happened that summer and discuss its relevance for today.""Lots of you will already be familiar with Wes Gray, and those of you who are not are in for a treat.
If you didn't own the nifty 50 stocks in the early 1970s, you underperformed and, thus, money continued to go into them.This article will attempt to provide reasons why this issue is important, why civil and criminal authorities are investigating, and why it is critical that public companies who issued options over the past...Backdating of stock options is an example of an agency problem.The most common example of this is when executives sell the stock right after excercising in-the-money options in order to receive cash.By doing so, the executive will be required to pay taxes on the value between the option's strike price and price of the stock when it was excercised.