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Top Paid Nikkei 225 Female Leader Shows Japan Gender Hurdles

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Nicole Seligman, president of Sony Corporation of America and Sony Entertainment Inc. Close

Nicole Seligman, president of Sony Corporation of America and Sony Entertainment Inc.

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Photographer: Jamie McCarthy/Getty Images

Nicole Seligman, president of Sony Corporation of America and Sony Entertainment Inc.

Only one female executive made it to the top-earner list of Japan’s Nikkei 225 companies last year. She is an American who lives in New York.

Nicole Seligman, president of Sony Corporation of America and Sony Entertainment Inc., is the only female among 185 executives who earned 100 million yen ($978,000) or more, according to data compiled by Bloomberg. Kazuo Kashio, president of Casio Computer Co. earned the most, with 1.2 billion yen in compensation, and Canon Inc. Chairman Fujio Mitarai was second with 1.1 billion yen, according to the data that looked at the pay of the top executives at Japan’s 225 biggest companies in the last reporting period.

The absence of Japanese women in the top echelons of business reflects challenges the country faces in boosting the number of female leaders as Prime Minister Shinzo Abe pledges to fill 30 percent of management positions with women by 2020. It is also a result of lower female labor participation in a nation known for long working hours, a shortage of childcare facilities and a culture in which women are often relegated to serving tea in workplaces.

“It’s becoming clear that Japan’s economic growth won’t be sustainable if we don’t utilize women in the workforce,” said Akira Kawaguchi, a professor at Doshisha University in Kyoto. “For corporations, they won’t be able to hire the best talent if they only focus on men.”

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Morning commuters make their way to work in Tokyo. Close

Morning commuters make their way to work in Tokyo.

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Photographer: Tomohiro Ohsumi/Bloomberg

Morning commuters make their way to work in Tokyo.

Women on average accounted for 6.2 percent of management positions, according to a survey of 11,017 Japanese companies by Teikoku Databank Ltd., Japan’s largest credit research company. About 52 percent of companies surveyed don’t have any female managers, it said.

Women fill 34 percent of management positions in the U.K. and 44 percent in the U.S., according to a Japanese government report.

Wage Gap

Even as Japan’s female labor-force participation rate rose to a record 64 percent as of June, it is still lower than the 82 percent rate for men, according to the Ministry of Internal Affairs and Communications.

Japan’s gender wage gap is the second widest among Organisation for Economic Co-operation and Development countries, trailing only Korea, where it’s 37 percent. The 27 percent gap in Japan compares with 19 percent in the U.S. and 6.2 percent in New Zealand, which has the lowest wage gap among OECD member countries.

Prime Minister Abe plans to bring more women into the workforce as part of his growth strategy for the world’s third-largest economy as the country’s population declines.

Out Drinking

Some women opt out of a career with large corporations, said Kumi Sato, president and chief executive of Cosmo Public Relations Corp. and a winner of Harvard Business School Club of Japan’s “Business Stateswoman of the Year” in 2012.

“For a long time, Japanese women didn’t want to pursue the let-me-join-the-big-corporations route; it’s really not a very attractive workplace,” said Sato, a mother of three. “You are at the mercy of a big corporate bureaucracy. You have to go out drinking with your boss and follow rigid rules.”

A lack of sufficient childcare support also has kept some women at home, said Sato. Only 38 percent return to work after giving birth, according to the labor ministry. About one in three women who quit said the working environment doesn’t allow them to juggle both work and family, according to a survey by Nomura Research Institute.

Sato, a former chairman of the American Chamber of Commerce in Japan, was part of a team that published a paper in June 2013 recommending the government loosen regulations to allow Japanese citizens to sponsor foreign domestic workers.

“Women have to carry a lot of the burden,” said Sato. “There are few support structures that give women a real option to continue to work.”

Two Groups

Men and women in Japan start off with the smallest wage gap. A female 20 to 24 years old at the beginning of her career makes about 86 percent of a male colleague, according to the National Tax Agency.

That percentage drops over time to about 50 percent for women in their 40s and remains at that level throughout the rest of their careers, the data show.

That compares with women in the U.S. earning 77 percent of what their male counterparts make, according to the U.S. Census Bureau.

The wage gap between men and women in Japan is partly due to a hiring system adopted by large corporations that divides employees into career and non-career groups, Doshisha University’s Kawaguchi said. Those in the career group, or sogoshoku in Japanese, will advance and become managers, while the non-career group, or ippanshoku, will be in charge of assisting others, he said.

Japan Culture

Men accounted for 88 percent of those hired for the career route, while women represented 86 percent of non-career hiring in 2011, according to a report by the Ministry of Health, Labour and Welfare.

“Large corporations already have different mindsets when they hire men and women,” said Kawaguchi. “Companies must choose both men and women with a mindset that both genders can become future managers.”

While about 60 percent of companies said they will actively hire women, only one-fifth of the companies surveyed plan to increase their ratios of female managers, Teikoku said in the report published on Aug. 14.

Japan’s corporate culture also tends to value the seniority system and overtime, contributing to the wider wage gap and a lower ratio of female managers, Kawaguchi said.

“It’s a custom among Japanese corporations to promote someone who knows the company well: people who have been with the company a long time and have transfered to different departments and places,” Kawaguchi said. “Women tend to end up quiting before experiencing all that.”

Extra Mile

Japanese companies are required to include in their annual reports a list of executives who earn 100 million yen or more. The list compiled by Bloomberg found 185 executives at 76 companies among the 225 largest firms.

Seligman joined Sony, the world’s third largest filmmaker, as executive vice president and general counsel in 2001, according to Sony’s website. Seligman declined to comment through Sony spokeswoman Yo Kikuchi, who said the company’s hiring policy is based on talent and experience, not gender.

Economic growth under Abe and local government efforts to cut waiting lists for childcare have already resulted in more women joining the workforce. The number of working women rose by 470,000 last year to 27 million.

Closing the gender employment gap could boost the country’s gross domestic product by as much as 13 percent, according to a report by Goldman Sachs Group Inc. analysts led by Chief Japan Strategist Kathy Matsui in May.

“Looking at the talent pool, they ignore half of the population,” said Sato. “Policy support is one thing. Women really need to go that extra mile in Japan.”

To contact the reporters on this story: Kathleen Chu in Tokyo at kchu2@bloomberg.net; Grace Huang in Tokyo at xhuang66@bloomberg.net

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net Brian Fowler

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