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Japanese CEOs are underpaid. Not only that, most of their salary is fixed regardless of performance, and they won’t make bold decisions for fear of missing out on cushy adviser roles after they retire


Atsushi Saito, 76, who is currently non-executive chairman of private-equity firm KKR Japan Ltd, where he works two days a week. (Bloomberg)

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No one in a Japanese company is paid based according to performance, not from the new grads who start work with irrelevant degrees and no experience, to the old fossils who run the show, and who get to the top by attrition and deal-making. Japanese executives work more for the prestige of their positions than the pay they receive.

In a Japanese company, you put in your time, and get promoted regularly, even if you spend three hours each day sitting on the toilet. You will become an assistant manager, and then a full manager, regardless of whether you are capable of managing or not. If you grovel and brown-nose better than the other managers, you will eventually make it to the top.

Worse yet, many of the top executives are former government bureaucrats, or brought in from mergers. They have no idea at all what they are doing, and do almost nothing for the "small" salaries they earn.

4 ( +7 / -3 )

Funny how these guys always think CEOs need to be paid more, but that the average employee is never underpaid.

3 ( +4 / -1 )

Yeah well what do you expect when there's a "next in line" approach to management. I'd say a large percentage weren't even manager material to begin with...

3 ( +3 / -0 )

Atsushi Saito, 76, who is currently non-executive chairman of private-equity firm KKR Japan Ltd, where he works two days a week. (Bloomberg)

Well, he would know, since he apparently occupies one of those "cushy adviser roles". LOL.

2 ( +5 / -3 )

I guess it is either that or it is like in some of the west where they are grossly overpaid. The things they both have in common is pay unrelated to performance - as evidenced by the banks immediately post-GFC - and cushy retirement packages, though there does seem to be at least a modicum of work involved in the Japanese case.

1 ( +2 / -1 )

A high ranking figure in business who thinks high ranking business figures aren't paid enough? Who could possibly have predicted it?

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I'm essentially a CEO, though that's not my title. I'm on a fixed salary, but two times a year I pay myself a performance based bonus. This was explained to me by my accountant as the way things are done in Japan. Of course our companies are small, not huge zaibatsu, so maybe they do things differently at that level.

1 ( +2 / -1 )

All CEO's are paid a low wage during the year, but the companies year round performance at years end is what they all get a percentage of. CEO's get like 10% or close to that of the companies net profit as a bonus.....

0 ( +1 / -1 )

...and regular employees are GROSSLY underpaid.

0 ( +0 / -0 )

It seems obvious to me, that there are no current CEO's responding to this short article.

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