Daiwa Securities Group Inc., Japan’s second-biggest brokerage, boosted pay for top executives by 36 percent last fiscal year as larger rival Nomura Holdings Inc. tripled compensation.
Chief Executive Officer Shigeharu Suzuki and his executive team received an average of 55 million yen ($590,000) for the 12 months ended March 31, up from 40.5 million yen a year earlier, according to a report sent to shareholders and posted on Daiwa’s website today. Nomura’s executives received 145 million yen, up from 41.5 million yen.
Salaries at Nomura reflect its attempt to expand investment banking worldwide and compete for staff on a global basis, while Daiwa concentrates more narrowly on Asia and beefing up services for individuals in Japan, according to Executive Search Partners Co., a Tokyo-based financial-services recruitment consultant.
“Nomura thinks of compensation as a kind of business investment to boost revenue in the future for higher profit,” said Katsunobu Komizo, chief executive officer of Executive Search. “Daiwa may think of it as a cost that should be minimized to increase the bottom line.”
Hiroharu Misawa, a spokesman for Tokyo-based Daiwa, declined to comment. The company determines compensation based on a person’s role, the firm’s performance and its share price, according to today’s report. Daiwa’s annual shareholders meeting scheduled for June 26.
Daiwa rose 15 percent last fiscal year, while Nomura gained 39 percent. Daiwa shares fell 1 yen, or 0.3 percent, to 406 yen on the Tokyo Stock Exchange, compared with a 0.4 percent decline for Nomura.
The company dissolved a 10-year-old investment banking joint venture with Sumitomo Mitsui Financial Group Inc. in December, with most of 230 bankers from Sumitomo Mitsui who worked at the venture returning to the Tokyo-based bank.
Daiwa plans to double revenue this fiscal year from Asia to more than 30 billion yen, it said in May, and reiterated plans to hire 300 more staff in the Asia-Pacific region by March 2012 for its derivatives and equities business.
Nomura acquired the Asian and European businesses of Lehman Brothers Holdings Inc. in 2008, gaining 8,000 employees and guaranteeing salaries and bonuses for some. Nomura will almost triple annual salaries for some investment-banking and trading recruits to close a compensation gap with workers who joined via Lehman.
“Nomura is taking more risks for the business, and human resources matter in investment banking,” Komizo said.
Daiwa’s staff costs totaled 170 billion yen last fiscal year, compared with net revenue was 458.1 billion yen, according to its annual financial report. Nomura’s staff costs were 526.2 billion yen, and net revenue was 1.15 trillion yen, it said in its financial filings.
Daiwa paid a total of 880 million yen to Suzuki and 15 other executives in base salary, and cash and stock bonuses, Daiwa said in today’s report. It didn’t provide figures for individual executives.