How mncs could revise their bonus structure

Reference no: EM133492054

Question: Managerial Exposure to Exchange Rate Risk

The managers of many U.S.-based MNCs have heard arguments that an MNC's exposure to currency movements will have unfavorable effects on its cash flows and earnings in some periods, and favorable effects on its cash flows and earnings in other periods, and that these effects will offset in the long run. Yet managers' compensation (including bonuses) for the current quarter or year is often based on the reported earnings. Thus, because the earnings are influenced by exchange rate movements, the manager's own compensation is influenced by exchange rate movements. Write a short essay on how MNCs could revise their bonus structure so that bonuses are not influenced by exchange rate movements. Alternatively, offer arguments to support leaving the bonus structure as it is.

Reference no: EM133492054

Questions Cloud

Identify at least two improvements to the place : In what ways are the Crofts taking better care of Kellynch-hall than the Elliots? Identify at least 2 improvements to the place.

How the lgbtq+ community functions as whole : how the LGBTQ+ community functions as whole. Please point out and discuss another "disaster" that eventually pushed new procedures, legislation, outlooks

Is this bond currently trading at a? discount : Is this bond currently trading at a? discount, at? par, or at a? premuim? Explain.b. If the yield to maturity of the bond rises to 7.00% ?(APR with semiannual?

Discuss the concept of community of practice : Discuss the concept of Community of Practice. Describe the key components of a community of practice.

How mncs could revise their bonus structure : How MNCs could revise their bonus structure so that bonuses are not influenced by exchange rate movements. Alternatively, offer arguments to support leaving

What impact did the experience have on your everyday life : What impact did the experience have on your everyday life? What did you learn that was directly related to your course objectives?

Identify one of the securities laws : Identify one of the securities laws, and provide an example of its application using real world examples. Try to choose a securities law that has not been

Whats the estimated stock price : The firm has $20 million in debt and $20 million of preferred stocks. It has 10 million outstanding shares. What's the estimated stock price based

Discuss the concept of community of practice : Discuss the concept of Community of Practice. Describe the key components of a community of practice.

User Account

All Pages