Citing an international trend to clamp down on risk-taking that could lead to financial disasters similar to the 2008 collapse of Lehman Brothers, banks will soon be required to disclose the salaries of employees who earn as much as board members do, a Financial Services Agency official said Monday.
Starting in July, banks will have to disclose how many such employees they have and their collective salaries each year, FSA Supervisory Bureau official Tsuyoshi Saito said. It "will be up to each bank" to disclose any further information, he said.
"We are doing this as part of an international movement to prevent banks from linking too much of an employee's salary to performance," Saito said. A performance-based pay system is believed to have led a few Lehman Brothers employees to invest heavily in risky securities backed by subprime loans, leading to the downfall of the Wall Street giant in September 2008.