Problem
Read to the article "Travel firm bosses paid $37m in bonuses as company failed".
Task
1. Explain the initial role of bonuses at Thomas Cook from the efficiency perspective of the bonus plan hypothesis of Positive Accounting Theory.
2. Discuss and explain the problems in the article with respect to bonuses from the opportunistic perspective of the bonus plan hypothesis of Positive Accounting Theory.
3. Explain how Thomas Cook management can "use of aggressive accounting methods to flatter its financial performance".
4. Refer to Thomas Cook's 2018 annual report which is contained at the following link:
5. Identify and explain the four principles which comprise its remuneration philosophy;
6. Explain the purpose of the annual bonus and how it is linked to the strategic objectives of Thomas Cook
7. Explain the purpose and role of malus and clawback arrangements.