Daiwa Securities Group Inc. is preparing to raise base salaries for its staff in Japan for the first time in four years, as the government renews its call on companies to hike wages to spur the economy.
"We have to raise wages,” Chief Executive Officer Seiji Nakata said in an interview. "This is not only because the government is saying so but also because the prices of gasoline, food and other items closely linked to everyday life are clearly increasing.”
Nakata said he is considering raising the sum of base salaries and one-time payments, excluding bonuses, by an average of "3% or more” starting April — a raise comparable to that offered in the year ended March 2019. Prime Minister Fumio Kishida is calling on companies to agree raises exceeding 3% at Japan’s annual labor-management wage negotiations in the spring.
Corporate Japan is under pressure as global inflation pushes up prices, and with Kishida focused on getting profitable firms to share more of their wealth with employees in order to achieve sustained growth. Daiwa, the nation’s second-largest brokerage, and some major local competitors posted double-digit income growth in the fiscal half-year that ended in September, despite Japan’s economy struggling with the pandemic.
"Our eagerness to raise wages, including the base pay, is underpinned by our profit,” Nakata said. "If our earnings were in bad shape, we would have to think about whether we should offer a raise in the first place.”
In the U.S., Wall Street firms are considering boosting bonus payments after a surge in deal-making activity this year. Goldman Sachs Group Inc. may boost its bonus pool for investment banking by about 50%, Bloomberg reported this month.