The principal-agent problem is found in most employer and employee relationships,for example,when stockholders hire top executives. The former are,presumably,hiring the latter to pursue their interests. However,Senior executives may pursue their own goals of status,high salaries,expensive perks,and job security rather than the stockholders'interests.◼ The principal–agent problem is found in most employer and employee relationships, for example, when stockholders hire top executives. The former are, presumably, hiring the latter to pursue their interests. However, Senior executives may pursue their own goals of status, high salaries, expensive perks, and job security rather than the stockholders’ interests