Against the backdrop of steadily increasing management compensation, the central aim ofthis study is, to describe the composition and incentives of management remuneration andshow an approximate estimate of the possible levels of current management rewards, basedon annual reports from the year 2010. The incentive effect of executive compensation isexplained by using a simple agency model, which is allocated to the relationship between theowners and the managers of a company. Furthermore, this work includes the latest findingson performance measurement, which mistakes occurred frequently in recent years, as wellas solutions to these problems. In the third part of this paper the individual components of themanagement compensation are discussed in more detail. Main attention is paid to thevariable, long-term compensation, because in the recent past particularly the variablecomponents of the management compensation have been strongly criticized in the publicmedia. In addition, this work describes the factors which affect the amount of managementcompensation. In the empirical part of this paper, the annual reports of 2010 of the 50companies were analyzed, which were listed in the German or Austrian stock index at end of2011. It can be stated as a result of this investigation that the extend of the fixed base salaryhas increased. This suggests that the demand for increased sustainability of the German andAustrian Corporate Governance Code is met. The rise in long-term variable remuneration,which can be seen in some industries, also indicates the use of sustainable incentive setting.The analysis shows that sufficiency and sustainability of management compensation arerequired and also implemented in response to the financial crisis.