Nikkei Asian Review – Survey Shows Japan’s Outside Directors Woefully Underpaid

Nikkei Asian Review – Survey Shows Japan’s Outside Directors Woefully Underpaid

Japan Inc. may be shortchanging some key executives. Outside board members in Japan seem to be underpaid, considering that they are now expected to play a central role in the reform of the country's corporate governance. One survey showed that Japanese outside directors are paid on average about 75% less than their U.S. counterparts. A key reason for the gap in compensation appears to be working hours. A survey conducted that Japanese companies spend about 24 hours annually on board meetings, while U.S. companies spend roughly twice that. But outside board members in Japan are now shouldering a growing workload, as they are expected to become more closely involved in management as members of so-called nominating and compensation committees. A growing number of companies are forming these committees to discuss personnel affairs of executives and remuneration. Hideaki Tsukuda, leader of Egon Zehnder's Tokyo office, said the debate will further intensify over remuneration hikes and payment methods in Japan amid the growing importance of outside board members.

Full Story: Survey shows Japan's outside directors woefully underpaid (April 11, 2017).