Subject : Accounting Theory

Within annual reports, companies frequently disclose information about how their managers are rewarded in terms of the components of their management compensation plans. Required: select two large companies listed on a security exchange and identify the components of their management remuneration plans. Then, discuss how the respective components would be expected to align the interest of the managers with those of the owner, and to minimize the contracting costs of the organization. Discuss also whether the scheme affect management behavior in increasing/decreasing the quality of information shared to public. (Hint: use Positive Accounting Theory framework)