The OECD Principles of Corporate Governance link manages' remuneration to shareholder interest to address which agency problem?

Question

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The OECD Principles of Corporate Governance suggest linking managers' remuneration to shareholder interest to address multiple agency problems, including the horizon problem (where managers might not invest in long-term projects that benefit shareholders), risk aversion (where managers might avoid necessary risks to improve company performance), and dividend retention (where managers might retain earnings for reinvestment rather than distributing them to shareholders). These measures aim to align the interests of managers with those of shareholders, mitigating potential conflicts.

The OECD Principles of Corporate Governance Link Manages' Remuneration to Shareholder