Bloomberg News

Nomura Cut Top 10 Executives’ Pay 38% After Earnings Slump

June 03, 2011

(Updates with consultant’s comment in fourth paragraph.)

June 3 (Bloomberg) -- Nomura Holdings Inc. cut pay for Chief Executive Officer Kenichi Watanabe and top executives by 38 percent last year after Japan’s biggest brokerage posted a profit drop, according to documents sent to shareholders.

The securities firm reduced total compensation for its top 10 executives to 899 million yen ($11 million) for the year ended March 31, from 1.45 billion yen a year earlier, the documents posted on Nomura’s website showed.

Watanabe and Chief Operating Officer Takumi Shibata oversaw a 58 percent profit decline to 28.7 billion yen for the year. The firm is yet to benefit from its 2008 purchase of Lehman Brothers Holdings Inc.’s Asian and European businesses, with operations abroad posting four straight quarters of pretax losses in the period.

“It’s inevitable that Nomura executives took a pay cut as the profit they generated doesn’t justify additional compensation costs,” said Katsunobu Komizo, chief executive officer at Executive Search Partners Co. in Tokyo.

The executive pay packages include salary, bonuses and stock, according to the document. Keiko Sugai, a spokeswoman for Tokyo-based Nomura, declined to give a breakdown of individual pay or comment on the drop in compensation.

Shares of Nomura fell 37 percent in the 12 months to March 31 and are down about 72 percent since the company bought bankrupt Lehman’s operations. They slid 1.7 percent to 399 yen at the close in Tokyo today.

Blankfein Gets Paid

Goldman Sachs Group Inc. almost doubled compensation for Chairman and Chief Executive Officer Lloyd C. Blankfein to $19 million for 2010 even as earnings dropped 38 percent and the stock was little changed, according to the New York-based firm’s proxy statement in April.

“Nomura’s profit level and compensation gap with peers illustrate the bank is yet to become a global player,” Komizo said.

Daiwa Securities Group Inc., Japan’s second-largest brokerage, paid 14 top executives 537 million yen in the year to March 31, according to a document posted on its website today. It paid 16 executives 880 million yen a year earlier, the company has previously said. That implies their average salary dropped to 38.4 million yen from 55 million yen.

Daiwa had a loss of 37.3 billion yen for the year ended March 31, compared with a profit of 43.4 billion yen a year earlier. Its shares declined 3 percent to 329 yen today.

Nomura will hold a general shareholders’ meeting in Tokyo on June 28, while Daiwa will hold its meeting on June 25.

--Editors: James Gunsalus, Russell Ward

To contact the reporter on this story: Takahiko Hyuga in Tokyo at

To contact the editor responsible for this story: Chitra Somayaji at

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