Final answer:
The correct answer is 'Acquisition of a foreign subsidiary' because it does not directly address agency problems, which stem from conflicts of interest between company owners and managers; instead, it deals with business expansion.
Step-by-step explanation:
The question asks which of the following is not a way in which agency problems can be reduced through corporate control. Agency problems arise when there is a conflict of interest between the owners of a company and the managers who are tasked with running the company. Among the options provided:
Acquisition of a foreign subsidiary does not necessarily address agency problems as it involves expanding operations and could potentially exacerbate oversight issues.
Executive compensation can align the interests of the managers with those of the shareholders if constructed properly to incentivize managers to act in the shareholders' best interests.
Monitoring by large shareholders is effective in reducing agency problems as large shareholders have a significant vested interest in the company and can exert influence to ensure management acts according to the shareholders' interests.
Threat of hostile takeover can dissuade managers from performing poorly or acting in their own self-interest at the expense of shareholders, as poor performance could make the company a target for a takeover.
Therefore, the correct answer is Acquisition of a foreign subsidiary, as it is not a method used specifically to address or reduce agency problems in corporate control. It's more related to business expansion strategies than internal management incentives or control mechanisms.