Andreas Delon’s Compensation. Andreas Delon is a French citizen who has been offered the position of CEO of LakePharma, a large French pharmaceuticals firm. LakePharma produces high-quality chemicals used by pharmaceutical firms around the world. Much of the production of LakePharma is sold in Switzerland, which means that Andreas Delon will spend most of his time there helping to market LakePharma’s products to Swiss pharmaceutical firms. He wishes to be paid in euros, not Swiss francs (CHF). LakePharma has agreed to pay Andreas’ base salary in euros, but insists on paying his sales commission and bonus (amounting to 25%

of his base salary) in Swiss francs. Andreas is unable to decide whether to agree to this suggestion or to insist on receiving all his remuneration in euros. He constructs the table on the next page showing the sales revenue to help him decide. What do you recommend for Andreas?

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Year Million Euros Change 1=CHF Million CHF Change 2015 1,000 1.05 CHF 2016 1,100 2017 1,250 2018 1,300 de de de % 1.06 CHF 1.07 CHF % 1.08 CHF do de de % % %