YOKOHAMA, Japan — The Japanese are finally finding out who is getting the big paychecks, thanks to a new rule requiring disclosure of pay for executives receiving $1 million or more.
But the list of millionaire bosses is surprisingly short, and many of them, it turns out, are foreigners - such as Nissan Motor Co. Chief Executive Carlos Ghosn, who raised the ire of a few shareholders when he announced Wednesday that his compensation of $9.5 million for the fiscal year that ended in March.
The disclosures mark a shift for Japan’s corporate culture, which has previously not fostered professional management based on risk-taking bya decisive executive with the hefty paycheck to back it, analysts say.
Instead, companies have made decisions by building consensus among a group of managers - all getting a fraction of the pay of their Western counterparts.
The Brazilian-born Ghosn, who also has French citizenship, told shareholders that Nissan is a global company with a diverse group of executives. Some 44 percent of its board directors are non-Japanese.
He also pointed out that his pay as chief executive was lower than what other chiefs were getting at comparable companies on average, which he said was $12.6 million.
Still, he was heckled by a couple of shareholders, who shouted, “Get out, Ghosn,”and another who stood up to question the pay, demanding that he share it with his workers.
They were a minority, and company’s pay proposals won shareholders’ approval without any trouble.
Unlike the U.S. and parts of Europe, Japan has not required companies to disclose executive pay until this year. And the move toward greater transparency in corporate governance has barely begun.
Some companies had reported executive pay voluntarily, but they were rare. More common was the practice of reporting just the combined amount of money that board members received, leaving much to mathematical guesswork.
Studies by consultant PricewaterhouseCoopers Co.estimate that top Japanese executives earn on average $500,000, or a quarter of what their American counterparts earn, at about $2 million.
Only about 1.4 percent of the board of directors in Japan receive $1 million or more, which likely translates to about 100 people whose earnings will be disclosed under the new rule, according to PricewaterhouseCoopers.
Last week, Japanese electronics and entertainment company Sony Corp. made headlines when it disclosed at a shareholders’ meeting that Chief Executive Howard Stringer got $8.8 million in annual pay, although the electronics maker has racked up red ink for two straight years.
Nearly half of Welsh-born Stringer’s pay came from stock options.
Business, Pages 26 on 06/24/2010