| Author Name | MIYAJIMA Hideaki (Faculty Fellow, RIETI) / SAITO Takuji (Keio University) / KONNO Yasuhide (Deloitte Tohmatsu) / TSUJI Kazuma (Deloitte Tohmatsu) |
|---|---|
| Creation Date/NO. | March 2026 26-J-012 |
| Research Project | Frontiers in Corporate Governance Analysis |
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Abstract
CEO compensation has long been recognized as one of the most important corporate governance mechanisms. However, in Japan, unless CEO compensation exceeds 100 million yen, firms are not required to disclose individual CEO pay. This study examines the trend of CEO compensation in recent years in Japanese firms by utilizing data from the executive compensation survey jointly conducted by the Deloitte Tohmatsu Group and Sumitomo Mitsui Trust Bank, which includes CEOs with compensation below the 100 million yen. The structure and changes in CEO compensation vary significantly depending on firm size. In large firms, stock-based compensation—particularly restricted stock—has been increasing, leading to substantial growth in overall compensation, whereas such trends were not observed among small- and mid-cap firms. Furthermore, board and ownership structure affect CEO compensation. Interestingly, while in the United States stronger monitoring by outside directors and other governance mechanisms tends to suppress executive pay, in Japan the opposite tendency was observed, with stronger monitoring associated with higher compensation.
