The 'Principal-Agent Conflict' is a well known problem within economics and finance. The problem is a result of misaligned incentives between management and owners of a business. The well-accepted, general solution, which most economists agree upon to alleviate the principal-agent conflict is to: O enact very strict regulations, and limit executive pay via federal mandate. O ensure that management never holds a greater percentage of equity (ownership) in the firm than the firm's founders. O pay management relatively higher base salaries, relatively larger cash bonuses, and relatively lower amounts of equity (stock or stock options) in the firm. O pay management relatively lower base salaries, relatively smaller cash bonuses, and relatively larger amounts of equity (stock or stock options) in the firm