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Assume that Riordan is considering an expansion to Japan and that Robert Lord's pay is $140,000 per year in the United States. Taking into consideration that an expatriate's pay would include housing, healthcare, transportation, allowances and premiums, and so forth, how would Robert Lord's pay as an expatriate differ from the pay of a Japanese national of the same age?

Is this difference equitable? How would Robert Lord's pay differ if he were relocated back to the U.S.?

Is this difference equitable?

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Solution Summary

Assume that Riordan is considering an expansion to Japan and that Robert Lord's pay is $140,000 per year in the United States. Taking into consideration that an expatriate's pay would include housing, healthcare, transportation, allowances and premiums, and so forth, how would Robert Lord's pay as an expatriate differ from the pay of a Japanese national of the same age?

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Robert Lord's pay as an expatriate will be higher than the pay of a Japanese national of the same age, because he needs to be compensated well in order to undertake this assignment in a foreign or offshore location. An expatriate is compensated higher than his local counterparts to ensure that the expat is motivated enough to adjust to the local conditions as quickly as possible and perform his duties as efficiently and productively as possible. If he will not be compensated well enough, he might not be interested in staying the foreign location, away from his home, for longer periods.

Further, he is also compensated higher than his local counterparts because he is supposed to be more experienced in conducting business in international scenario, and brings a level of expertise to the local branch that is not matched by the local Japanese nationals.

Therefore, Robert will not only be paid more than $140, 000 per year, ...

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