The primary conclusion of agency theory is the importance of tying pay to performance, to provide employees with appropriate incentives. (sciencemag.org)
Much of the academic work on agency theory in the decades since has focused on ensuring that managers seek to maximize shareholder returns — primarily by aligning their interests with those of shareholders. (hbr.org)
It is rooted in what's known as agency theory, which was put forth by academic economists in the 1970s. (hbr.org)