改语法In order to solve the conflict of interest between management and shareholders which is called the agency problem profit-related pay and share-based pay are applied to ensure goal congruence betwee

To address the agency problem, which refers to the conflict of interest between management and shareholders, companies often implement profit-related pay and share-based pay to ensure goal congruence. Since shareholders prioritize profitability and returns on their investment, while directors are more focused on their own compensation, these forms of payment can incentivize directors to act in a way that maximizes shareholders' wealth. By aligning the interests of directors with those of shareholders, profit-related pay and share-based pay can help mitigate the agency problem