Jimi Says Companies Determine Pay After Report FSA to Cap Shinsei Salaries
Japanese Financial Services Minister Shozaburo Jimi said 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 in Tokyo today. “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 about $230,000 a year, the Financial Times reported today. 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.
Jimi’s predecessor as head of the banking watchdog, Shizuka Kamei, said in May that compensation over 100 million yen ($1.2 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 yen of public funds as of March 2010, according to the lender’s annual report.
The Financial Services Agency this year began forcing listed companies to disclose compensation of board members or executive officers exceeding 100 million yen in filings to the Ministry of Finance. Companies now must give a breakdown of compensation packages, including stock options, bonuses and retirement payouts.
Jimi, a member of junior coalition partner the People’s New Party, was reappointed financial services minister today in a reshuffle of Prime Minister Naoto Kan’s Cabinet.