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This paper analyses the pay and performance of the managing director (MD) of sports clubs on the island of Madeira, focusing on the role played by the economic performance of the club, together with that played by the structure of the board and the individual characteristics of the manager. If the MD can influence the board structure, agency problems arise, which in turn allows the MD to extract rent and demand remuneration in excess of the equilibrium level. The policy implication is derived.
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Barros et al. (2007) studied this question.
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