“Company heroes” versus “superstars”: executive pay in Japan in comparative perspective

Abstract

In international comparison, the level and the performance sensitivity of executive pay in Japan are low. Both characteristics can be related to the prevalence of internal labor markets. These not only select the ones who will be promoted to the top, but also strongly influence the way by which the level of executive pay is determined. Last but not least, life-long company careers provide for forms of control that can function as a substitute for explicit incentives built into remuneration packages.

Conflict or alignment? The role of return-oriented foreign shareholders and domestic relational shareholders in mitigating earnings management

“….] firms were effectively precluded by law from using stock options as part of the executive compensation package” (Kato et al, 2005: 436) and where the fraction of executive incentive compensation (including stock option grants) has been traditionally low compared to that of other countries, such as the United States (Waldenberger, 2013). Nonetheless, recognizing the potential limitations of a binary variable, we have manually collected additional data that allow us to check the robustness of our findings to an alternative operationalization of the stock option pay variable.…”