On Dec. 10, Masaaki Tanaka, former vice president of Mitsubishi UFJ Financial Group, told a news conference he would step down as president and CEO of Japan Investment Corp., an entity set up by the government in September to develop new industries through capital investment.
Tanaka and eight other JIC board members resigned over the Ministry of Economy, Trade and Industry’s decision to pay them less than what it had initially promised. Economy minister Hiroshige Seko has pledged to return a month’s worth of his own pay for approving the original annual remunerations, which were more than ¥100 million if the investment was successful, and it’s not difficult to sense that the salaries might not have been an issue if former Nissan Motor Co. Chairman Carlos Ghosn’s own compensation wasn’t foremost in the news cycle at the time.
The conventional wisdom about executive pay is that companies are expected to offer sizeable numbers in order to attract and retain the best talent available, and that the fierce competition brought on by the increasingly global economy keeps driving these salaries higher. A corollary of this narrative is that Japanese executives typically don't enjoy this benefit due to Japan's corporate pay structure, and make less money than their foreign counterparts do.