There are 20 ‘mysteries’ to be answered regarding Japanese executive pay and if they are allowed to continue “Japan will be left behind by the rest of the world in the global era” says Nikkei Business in their 2nd September 2013 edition. Their cover story delves into whether there is any correlation between the highest paid executive in a Japanese company and ROE, profit/loss and changes in market capitalisation. Their conclusion is that there is little correlation, but the stars in terms of there being a strong correlation (ie “worth the money”) are:
Isao Moriyasu, CEO of DeNA (provider of mobile commerce sites and gaming platforms) for 32.5% ROE per Y100m ($1m) salary. Those executives making more than a $1m in remuneration with negative ROE include Shoji Muneoka, President of Nippon Steel and Sumitomo Metal and Yoichi Wada, former President of Square Enix (video game publisher).
Katsunori Nagayasu, formerly President of Bank of Tokyo-Mitsubishi UFJ, with a profit of Y666bn per Y100m of salary. Carlos Ghosn of Nissan, with his salary of nearly Y1bn ($10m), several times higher than the next highest paid Japanese executive (Ken Kobayashi of Mitsubishi Corp) is the least value for money with only Y35bn per $1m of salary of those companies actually making a profit, but there are plenty of executives earning over $1m at loss making companies such as Shoji Muneoka and Yoichi Wada (again), joined by Hisayuki Suekawa, formerly of Shiseido (see a previous post on how he stepped down for “health” reasons)
Akio Toyoda, President of Toyota – for an increase in market capitalisation of $25bn per $1m of salary, compared to those whose companies saw a decrease in market capitalisation and earn over $1m, namely: Yoshiharu Inaba of FANUC (a robotics company with operations in France and the UK that started life as part of Fujitsu, but still run by the founding Inaba family with a slightly odd looking website), Makoto Kimura of Nikon, Kunio Noji Chairman of Komatsu, Ken Kobayashi President of Mitsubishi Corporation and Fujio Mitarai of Canon.
I will examine the 20 mysteries in the next post.
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