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Japanese brokerage cuts CEO, chairman pay over insider trading scandal
[TOKYO] It's a familiar story: a Japanese company is embroiled in scandal, then executives take pay cuts in a bid to make everything right.
SMBC Nikko Securities Inc is the latest firm to do just that. Chief executive officer Yoshihiko Shimizu and chairman Tetsuya Kubo are forgoing 20 per cent of their salaries for two months after a former employee was arrested on suspicion of insider trading.
"We take this matter very seriously and sincerely apologize to our customers and other concerned parties for causing great concern and inconvenience," the Tokyo-based unit of Sumitomo Mitsui Financial Group Inc said in a statement on Wednesday.
The firm pledged to "take all necessary steps" to restore trust following the incident, in which the suspect allegedly gave tips on an acquisition to an acquaintance who then bought shares of the target company.
The gesture is widely used in Japan as a way for managers to show contrition and responsibility without going so far as to resign. Below are some other recent examples of executives in the country taking pay cuts following mishaps at their firms.
• Japan Exchange Group
The stock exchange operator said in November that CEO Akira Kiyota will take a 30 percent pay reduction for three months after breaching internal rules by investing in infrastructure funds.
• Japan Airlines
A drunk pilot cost President Yuji Akasaka 20 percent of his salary for three months, the carrier said in November.
• Chiyoda Corp
The energy engineering firm said in November that its president and chairman would take a 50 percent pay cut for five months after spiraling costs for an LNG project led the company to warn about its future as a going concern.
• Mitsubishi Materials
The manufacturer said in September that executives at three units would forgo 10 percent of their pay for October amid a scandal over the falsification of product data.