1. (2 points) A very successful and profitable company like FANUC (40% operating margins, huge cash reserves, little debt, strong competitive position etc.) should not change, but instead simply continue along the path that brought it success. Give an argument against this statement.

2. (3 points) We prefer to pay executives with cash and bonuses rather than stock and options. Bonuses provide strong incentives. Do you agree or not? Discuss.