C. Recent Developments in Japan's Economy Next, I will talk about developments in Japan's economy. Japan's exports and production continue to show some weakness, mainly in the manufacturing sector, having been affected by the slowdown in overseas economies, particularly China (Chart 2). On the other hand, domestic demand has continued to expand moderately.
One problem is that stock options, as currently structured, often provide only a loose link between compensation and successful management. A company's share price, and hence the value of related options, is heavily influenced by economy-wide forces--that is, by changes in interest rates, inflation, and myriad other forces wholly unrelated to the success or failure of a particular corporate strategy.