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How was the Principal-agent problem addressed in Nvidia corporation? Give details. softcopy answer

How was the Principal-agent problem addressed in Nvidia corporation? Give details.

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For NVIDIA corporation, Principal are the shareholders and agent is the leadership management of the company. To make sure that there is no principal- agent problem it is crucial that the top management functions in the best interest of the shareholders. This has been archived by giving shares to the top management of the company. Thus the interest of the shareholders and leaders become aligned. The top management and their shareholding are given below:

  • Jen-Hsun Huang the CEO of the company has 1.275 mn shares of the company and he owns 3% of the company
  • Ajay Puri, EVP operations has 250,000 shares of the company
  • Colette Kress , CFO owns 242000 shares of the company.
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