Principal-agent relationship

Principal-agent relationship

Occurs when one person, an agent, acts on the behalf of another person, the principal.
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The court went on to note: "[specifying the precise amount and form of director compensation in an equity compensation plan when it is submitted for stockholder approval 'ensure[s] integrity' in the underlying principal-agent relationship between stockholders and directors 'by making the directors suffer the ugly and enjoy the good that comes with a consistent, non-discretionary approach' to their compensation.
In the framework of the principal-agent relationship introduced in the previous section, the firm has empowered the exercise of power of the lender over the borrower and the employer over the employee; in the generic class of power relationships in the universe of voluntary competitive exchanges this has not been the case in the buyer-seller (consumer-firm) relationship, although from an economic viewpoint the buyer is the principal agent.
With regard to the fourth National Carbide factor, a principal-agent relationship must not merely be an attempt at an assignment of income.
Complicating matters is the fact that some of the same courts that recognize the foregoing characteristics as defining a fiduciary relationship also have found fiduciary relationships may exist absent these elements and where there is just a principal-agent relationship.
Thus, no principal-agent relationship could have been formed under Florida law and the insured should not be able to maintain an action against the wholesale broker.
Rather, we focus on goal congruence, whether SOX effectively realigns the principal-agent relationship to improve the intrinsic value of the firm.
30) In the following section on organizational justice, we examine the dilemmas of administrative accountability and of conscience and the impact military voice has in the principal-agent relationship, and how this relationship can be related to an Error of the Third Kind.
As noted above, the right to control the manner and methods in which work is performed by an agent is often the harbinger of establishing a principal-agent relationship.
The mere purchase of a product from a supplier does not establish a master-servant or principal-agent relationship between the buyer and seller," the court said.
Self-imposed limitations do not change the principal-agent relationship.
CAT 2006-03 (4/1/06) narrowly defines the principal-agent relationship and substantially reduces the use of this exclusion.

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