Resona Holdings Inc. has decided not to pay retirement benefits to board members and executive officers who have remained with the troubled banking group for their past service through June, banking sources said Tuesday.
Resona, which last month was forced to seek a fresh injection of public funds, has already said it will not pay lump-sum retirement allowances to Yasuhisa Katsuta, the former president of the holding company, and other top executives who have resigned to take the blame for the group’s plight.
Resona has concluded that top executives who have remained should be also subject to the same treatment, the sources said.
Under the plan worked out by Resona, board members and executive officers of both Resona Holdings and its key banking units — except Nara Bank — will lose all their lump-sum retirement allowances pegged to service through June of this year.
The measure is expected to affect Resona Holdings’ new president, Kenji Kawada, and some 40 other executives.
The standard practice in Japan is to link lump-sum retirement payouts to length of service. The executives affected by Resona’s plan will receive payouts calculated as if they had started working as directors in June.
Even if Resona gets back on its feet and is removed from what will effectively be government control, these executives will receive much smaller retirement allowances than they would have otherwise.
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