Japan bank CEOs are paid a fraction of what global rivals make

Culture plays a role in Japan, as lenders tend to be viewed as semi-public entities. PHOTO: AFP

Updated

Published

Jun 28, 2023, 12:37 PM

TOKYO – The chief executives of Japan’s deal-hungry mega banks are earning a fraction of what their global peers make, showing how the nation still frowns upon outsize pay packages even with profits forecast near a record.

Mitsubishi UFJ Financial Group CEO Hironori Kamezawa’s total compensation was 257 million yen (S$2.41 million) for the year ended March, including stock awards, according to a filing by Japan’s largest bank.

Sumitomo Mitsui Financial Group CEO Jun Ohta received a total of 186 million yen, while Mizuho Financial Group CEO Masahiro Kihara was paid 146 million yen.

The size of their pay cheques is dwarfed by compensation in the United States and other major markets.

JPMorgan Chase CEO Jamie Dimon was paid US$34.5 million (S$46.6 million) in 2022, while HSBC CEO Noel Quinn took home US$7.1 million.

In Singapore, DBS Group CEO Piyush Gupta was awarded about $15 million.

The Japanese banks’ relatively meagre pay came after they posted some of the highest profits in recent years and embarked on a string of deals to beef up their presence across Wall Street.

Culture plays a role in Japan, as lenders tend to be viewed as semi-public entities, while the infusion of government funds during the nation’s financial crisis in the late 1990s has left its mark.

Japanese companies have traditionally taken a view that compensation is a reward for having successfully risen through the ranks in an organisation, said Mr Takaaki Kushige, senior director at the Japanese unit of Willis Towers Watson.

In the US and elsewhere, the pay cheque often reflects their performance as leaders through profits and share prices, he said.

In Asia, executives at Chinese banks, some of the world’s biggest, also earn a fraction of what their global peers make.

“There are some Japanese companies which have started revamping their corporate governance and raising top management compensation to the levels of the US and Europe,” said Mr Kushige. “But it will take time for all to catch up, since this is an issue rooted in entrenched views.” BLOOMBERG