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Financial services minister Shozaburo Jimi said Friday that companies in general should decide their executives’ pay, responding to a newspaper report that the government wants Shinsei Bank Ltd. to cap salaries.

“Generally speaking, the level of a company’s payroll should be determined by its management and agreed between workers and the employer,” Jimi said at a news briefing. “It’s important that a bank with public funds sets out a decent management plan including appropriate payroll costs.”

Shinsei, which is partly owned by the government, is under pressure from the Financial Services Agency to limit salaries and bonuses at around ¥19.7 million a year, the Financial Times reported Friday.

The Tokyo-based bank in June replaced foreign executives after two years of losses, a failed merger and government criticism of the company’s compensation policy.

Chief Executive Officer Shigeki Toma and others may be exempted from the remuneration cap, the newspaper said. Eiji Otaka, a spokesman for Shinsei, declined to comment on the report.

Jimi’s predecessor as head of the banking watchdog, Shizuka Kamei, said in May that compensation of more than ¥100 million for non-Japanese executives at Shinsei was “exorbitant.”

Four executives who earned above that amount, including Chief Financial Officer Rahul Gupta, resigned the following month.

Shinsei had ¥216.8 billion in public funds as of March, according to the lender’s annual report.

The FSA this year began forcing listed companies to disclose compensation of board members or executive officers exceeding ¥100 million in filings to the Finance Ministry. Companies now must give a breakdown of compensation packages, including stock options, bonuses and retirement payouts.

Jimi, a member of junior coalition partner Kokumin Shinto (People’s New Party), retained his post in Friday’s Cabinet reshuffle.

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