Within annual reports, companies frequently disclose information about how their managers are rewarded in terms of the components of their management compensation plans. For example, within IAS 24 (and AASB 124 within Australia) there is a requirement that information about the components of rewards paid to key management personnel be disclosed within a company’s annual report.

Required: Select two large companies listed on a securities exchange and identify the components of their management remuneration plans. You are then required to explain how the respective components would be expected to align the interests of the managers with those of the owners, and to minimise the contracting costs of the organisation.