a. Explain what agency theory suggests regarding how to structure
executive compensation. (6 marks)
b. Review the study by Yusuf et al. (2018). What arguments do the
authors provide to suggest that agency theory is not applicable for
determining executive compensation in developing countries?
(8 marks)
c. Using the Hofstede Insights website: https://www.hofstedeinsights.com/product/compare-countries/ compare the cultural
scores for Australia and Pakistan.
Explain what the differences in the scores between Australia and
Pakistan indicate, regarding:
i. uncertainty avoidance and
ii. long-term orientation
(8 marks)
d. How might your discussion in c. above be used to further explain why
agency theory may not be useful to guide in the determination of
executive compensation in Pakistan (build on what you have written
in c., do not use the arguments of Yusuf et al. (2018) in answering
this question)?
(6 marks)