Motor1 is controlled by a PID whose setpoint is the driver's position command and whose process variable is position feedback from encoder1. The output of this PID is limited to 90% to allow for motor tolerances as suggested by Steve in post#9.
Motor2 is controlled by a closed-loop controller whose output is the sum of two terms:
1) the output from an Integral controller whose setpoint is encoder1 position and whose process variable is encoder2 position, and
2) the output from a Proportional controller whose setpoint is the driver's position command and whose process variable is encoder2 position