Japanese presidents aren't rewarded for improving shareholder value. Our data show that U.S. CEOs get paid about 100 times more for raising shareholder value than Japanese presidents.
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Waseda University Prof Katsuyuki Kubo, who co-authored a paper on the correlation between Japanese executives’ compensation and their firms’ return on assets. (BusinessWeek)
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Ah_so
U.S. CEOs also seem to be fantastically well rewarded for destroying shareholder value, it seems.
But the overall point is fair - Japanese firms are not run for the owners, but more for the employees. P/E ratios always stay high, rarely dipping below 20, but without the growth of old, it is not justified from an investor's point of view. Also dividends are very low. Dividends are the investor's income, yet the companies refuse to distribute them.
The only reason for buying Japanese equities is to take advantage of their volatility, but this is one of the reasons that they are so volatile.
If it weren't for the cross-shareholdings of Japanese firms, equities would be fairer priced and more liquid.
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