Japan Airlines' CEO pays himself less than the pilots, takes the bus to work

When Japan Airlines hit hard times in 2009 and began to lay off its staff, JAL CEO Haruka Nishimatsu cut his own pay to less than that of his pilots and eliminated all his perks. He now rides public transit to the office and eats in the employee cafeteria, standing in line with his colleagues.

Japan Airline Boss Sets Exec Example (via Reddit)

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

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Anonymous

Tokumei, The Nipponese, Anon, Pantograph: you all claim that this is “PR” or “theatre”. It might have some good effects on the culture within the corporation. That does not in itself make it PR any more than me saving a child from drowning is “just PR” because others will feel good or I will get a pat on the back. The man has recognized what is right and acts accordingly. He signals that he does not need extravagant and exclusive perks and props to do his job. His actions express that he and others are moral equals. That there is this thing called solidarity. The money saved from not having to pamper a CEO with luxery can instead go to the workers where it, on the margin, will make a real difference. Many parents can’t afford to send their kids on the school trips. Every dollar (or yen) counts.
Anonymous

There oughta be a law– we should make them ALL do this.
Every CEO, everywhere.
quitterjunior

This is one problem with the libertarian ‘bootstraps’ mantra. Especially in a deregulated market, the amount and quality of work you perform does NOT correlate to your quantitative ‘success’.

First, because the value of your sweat and/or innovation DECREASES the higher you are on the ladder. As an executive, you are no longer paid for punching the clock or even for bright ideas. You are paid to make informed decisions. Your new job title is liability-avoider. In exchange, you get EQUITY (not salary, see firstbakingbook). Nevertheless, in most cases, unlike lower-level employees, your fate will not be tied to the fate of the company. So you are, in short, paid an extraordinary amount of money to take on the distasteful, but lucrative role of scapegoat. Any decision you make will be questioned by the press, or worse, raise liability for the company. All very unnerving. Might even mean you require a weekly massage. But the actual WORK you accomplish in that position is infinitesimal. Stamping approval deserves a clerk’s pay. The very idea of even low-level executives getting MORE money than people who toil their minds and bodies is ludicrous. Decisions are easy. ‘shake shake’ “Signs point to yes.” Blamo!

Second, because certain moneys are not ‘earnable’… 200 million per year? No one can DESERVE that. I don’t care if you cured effin’ cancer. You get a hug and my utmost respect. What you DON’T get is more money than twenty dynastic generations would even know what to DO with….PER YEAR!!

Libertarianism is an apologia for the already-wealthy.
- Sam125
  
  Sure, the nature of the job becomes more abstract the further up the management chain you go but how do you justify having the uppers being paid millions in salary and equity when they cut jobs and salary for the rank and file? You can’t, because it’s bupkis. The only downside about this article is that it happened to a Japanese CEO who tend to treat their employees on a much more human level and actually have integrity and believe in honor and not a can’t-fail, golden-parachute US CEO.
AirPillo

I’ve always been told it’s a lot more common in Japanese business culture for companies to make cuts at the top if they can before they consider layoffs. Symbolic shows of solidarity by executives taking heavy pay cuts are not uncommon. When companies promote mostly from within this kind of solidarity is more common.
Anonymous

Commie.
Anonymous

Everything he says about there being a much smaller discrepancy between pay at the top and the bottom is true. It’s also common practice in Japan for the stockholders concerns to be secondary to the overall concerns for keeping the company alive and keeping salaried employees on the payroll. It’s not meaningless, as some people are suggesting. Business really is different in Japan.

That in no way is a suggestion that there is altruism at work, but simply that the Japanese don’t value or embrace conspicuous wealth or excess as Americans do. They aren’t egalitarian necessarily, but they don’t ask employees to tolerate more than the guys at the top do in most cases.

This is part of why there is so little crime in Japan. They income gap is very much narrower so the perception that there are those that have a lot and those that have a little is quite small. People don’t grow resentful and act out criminally if they feel their lot is the same as most people’s. A large middle class creates social stability and if they all lose at a similar rate, people accept it with greater equanimity.
Tzctboin

I am sure most of you have not read Karl Marx, most likely because you have been brainwashed to believe that he had nothing useful to say about anything, after all Marxism collapsed, right?

Marx and Engels explain with great accuracy why the moneyed classes are abusing and exploiting the salaried classes. This is not a matter of political interpretation, it is a matter of simple maths reproduceable with pen and paper.

It is despiriting to read comments on this thread in which people truly believe that the value of the work performed by people higher up in the organizational charts is intirinsically more valuable and stressful.

Well: doh! The people doing those well paid jobs while working from home are setting the salries and drum the corporate values in which we all get weekly emails about how they are so brilliant while people in the shop’s floor get shitty performance appraisals in order to adjust their paltry inflation busted bonuses to the bell curve irrespective of merit.

The success in Western countries of the upper classes has been to convince the middle and working class that “we are all on this together” when this is patently untrue and to deride anybody that questions the common wisdom as communist, socialist or whatever other monikers they seem to find.

It is not that rich people are bad, the system works in a way that favour the rich.

Simply the more you leave capitalism work on its own it has intrinsic failures, one of them being the concentration of wealth in a few hands.

But maybe I am wrong, all those rich bankers, hedge fund managers and other Wall Street types kept their homes and enough money to lead comfortable lifes and set economic policies for the next economic cycle. In contrast the ones paying for the mess are people that need a regular paycheck to avoid going under.

So perhaps rich people are not bad, but it should be scant commfort to realize tha the whole economic system always favours them.
- togi
  
  See, I often read or hear people saying that Marx &co ‘proved’ that capitalism inherently creates societal fracturing, monetary imbalance etc. But I’ve never actually got any of them to explain these proofs; I’m just assured they exist. Sometimes I’m asked, if I can’t be bothered to read the books, then why should they be bothered to explain the theories to me? They might have a point, but any other subject I’ve talked about with people, they’ve been able to explain, or at least try to explain a theory or proof.
  
  So I’m left to think that perhaps these proofs are incredibly complex and can only be understood in the context of Marx’s writings, or that the people who’re so convinced they’re true don’t actually understand them enough to explain them, or that the proofs are wrong.
  
  Maybe one day I’ll read the books myself and find out, but just to save a little time, could you reproduce the maths for me?
- bja009
  
  Brainwashed? Actually, at the college I attended, Marx was required reading. And it was a relatively conservative school.
  
  @Togi – I read the Manifesto, though I freely admit to only skimming Capital. I don’t recall much in the way of math either. Tzctboin, can you help us out? I’m interested in your take here.
Szos

This would almost NEVER happen here in the Land of the Plenty… our CEOs think they are entitled to extravagant salaries that would have made Kings in the olden-days blush.

Our CEOs on average make about 500X what the average worker at his company makes.

No other country is even remotely close to that level of greed… most fall somewhere in the 10 to 50X level.
- firstbakingbook
  
  No, this does happen here, and it’s fairly meaningless. During the internet bubble crash I was working for a very large company in the valley, whose CEO cut his salary to $1, in a similar gesture. Thing is, his salary was a negligible portion of his income, which came largely from stock grants.
  - Anonymous
    
    It is not meaningless. The point is not “not to win any money”… the poing is to make an statement for his workers. You’re talking like if giving up your salaries and perks meant nothing… that, or having to take public transport being a CEO used to not doing it.
    
    The point is he chose to make a sacrifice (big or small we’ll never know… and doesn’t matter)to show support to his people. I don’t know many people who could do that willingly.
    
    And definitely we need more of them.
  - donotclickjim
    
    “and eliminated all his perks”. Nope, it doesn’t happen here.
  - Mister44
    
    Yep. Owners of small business often go years before they officially pay themselves. Short term not paying for your salary is hoped to be made up with your stock/profits later.
- Anonymous
  
  you forgot straight up country dictators. see: that egypt guy’s bank account
oheso

He’s waiting for the government bail-out to give himself a really huge bonus.
- Anonymous
  
  Oheso:
  
  http://online.wsj.com/article/SB10001424052748703837004575012323580338724.html
  
  Bankrupt.
  - oheso
    
    Bankrupt.
    
    Given I’m well aware of that, perhaps I was offering a satirical remark?
Anonymous

Honourable. So very much so… The pilots likely do more work than the CEO, so it might be appropriate for him to keep his pay and life/workstyle as it is, even when things improve.
Donald Petersen

I wonder if he travels long distances by train rather than air. Maybe he knows something we don’t.
Antinous / Moderator

Good for him. I eagerly await a revival of seppuku for disgraced CEOs.
- CastanhasDoPara
  
  and Mark (no multiple reply feature, TS right)
  
  Dude, I’m not even going to read the comments. Whether or not this is true, and I believe that it is, good on him. Too bad this sort of honor can’t be found within the US of A!! At the last legit job I had the owner of that small business was told by his accountant that he should spend about 40k more on salaries in order to lessen his tax “burden” so what did he do, pay himself 40k more, buy a white-trash Cadillac(Lincoln Towncar) and fired me and another gal while he hired two other fresh of the street rubes that didn’t know jack about his business. That MF should have taken the wakizashi to his own belly and left his children the proceeds. At least they treated me (and her) like an equal and respected what we did for the business. It is my firm hope that asshats like him get what they deserve. Because they can’t act like this guy. So, yay Haruka Nishimatsu. One good example in a sea of shit-bags.
Zergonapal

I agree that paying a crappy CEO makes no sense at all, but other than that I believe a lot of CEOs earn their wage by the fact that they almost do not stop working until they go to bed.
Us average joes get to do our shift and then leave work at the door when we log out, middle management and upwards get to take their work home with them and while we may not get payed as much we will do not have to deal with the stress.
Mister44

You know, I think a lot of the CEO wages are BS, as are their parachutes. I acknowledge those who have the skills to run large company to be paid a premium. But we have all heard of a failing company paying millions to a fired CEO.

I heard an interesting idea about that the other day. Companies keep doing this, because if they don’t it could be a sign of weakness and their stock will be affected. Stephen Levitt pointed it out when talking about the financial schemes of drug dealers.
Tofagerl

In Japan this is a sign of dedication and trust in the company, not a PR-move like Steve Jobs getting 1 USD salaries.
You Americans are jaded, but you honestly have every right to be considering how fucked up your owners have treated you :(
Anonymous

Some CEO perks are useful, and employees may even benefit from them. Do you really want a CEO to miss an important investor meeting because he had to rely on public transportation to get there?
g0d5m15t4k3

Awesome. Guess who I work for who would never do such a thing? Jamie Dimon. But I also don’t give a shit about him like the employees for this Japanese fellow do. I really don’t think company loyalty exists in America.
- bcsizemo
  
  Why should it? I know of very few places where your boss actually cares about you as a person.
  
  You can only take getting bent over so many times before you grow apathetic and just don’t give a shit anymore.
- Anonymous
  
  It’s hard to be loyal to a company when they take every chance they can to screw over the lower rungs for an extra buck in the profit margin.
ill lich

I don’t recall ever saying American CEO’s have horns and eat babies, in fact I didn’t even call them evil, I implied they had no honor. A gross generalization of course (I’m sure there are some with honor), but we have all seen the actions of many high profile American corporations in recent years; please explain how the actions of the upper levels of Enron or any of the companies involved in the subprime mortgage crisis were honorable. If these men cared about their employees or shareholders they wouldn’t have been so reckless and willfully ignorant. These companies did poorly, and the CEOs still handed out bonuses. Not only is that dishonorable (in my apparently skewed moral judgment), but it’s just bad business.
grimc

And hey, while mentioning the wealthiest 1%, how many of them are hot movie stars? They aren’t even CEOs of anything.

Then why bring them up?

Oh yeah, because you think CEOs are bashed because they’re rich, when it’s actually because of the rotten methods they use to stay that way. And here’s something to consider: In a story about the chief of one of the world’s major airlines, when somebody comments about generic US CEOs they’re probably not talking about the CEOs of Wooden Paperclips International or Dave’s Beef N Brew (Although Dave did turn into a major asshole when he opened his third location).
- Mister44
  
  I bring them up because there have been several “Rich People BAADD!” posts this week. I guess it is tangent to this topic.
  
  re: “In a story about the chief of one of the world’s major airlines, when somebody comments about generic US CEOs they’re probably not talking about the CEOs…”
  
  Yeah – but that’s my point. You take the bad apples and declare the whole bunch spoiled. Not every Fortune 500 company CEO is an unethical asshole.
  
  The original comment I replied to was “No, but an American CEO’s approach would be to grab as much as he could for himself before the whole thing collapsed around him.” And my point is that you are characterizing this as a typical action, when I don’t believe it is.
  - Fifth
    
    If you’re right that the feelings of the rich are so very, very badly hurt by people saying mean things about them, they can always go ahead and, y’know… give their money away, and not be rich anymore. No really it’s okay, they can let go of that crushing burden.
    
    But I mean no you’re right, we’re just SCAPEGOATING them for all of our problems these days, just because they have wealth and power and a disproportionate influence over events. Wait, I mean, errr……
Mark Frauenfelder

He better not come to the USA. The Tea Party will rip him to pieces and crush his bones to suck out the marrow for not acting like the robber barons they have been brainwashed to adore.
Anonymous

Only in Japan.
Anonymous

Unfortunately he’s a totally incompetent CEO who’s made horrible business decisions.

Would you rather feel good about seeing the CEO making less than you did when you had a job, or have a job? JAL employees I know are not so impressed with him.
fnc

In America he would have had a golden parachute and pulled the ripcord for a cool few million.
Anonymous

Hmmm.

Certainly, not all US CEOs are the greedy heartless demons we make them all out to be. There are those who strive to make a positive impact on their community and humanity at large, and there are those who see their profit as an ends for any means. Neither defines every CEO, however both categories and every shade between impact everyone else.

This is why it hurts so much to see flocks of executives taking every penny for themselves and running when the situation calls for restraint and dedication. Of course the employees and their families are affected adversely and that is bad enough, but it goes beyond that. Anyone relying on that company suffers right along with it when it fails to produce, including other companies and their clients. The state suffers as it has to take the burden of the least fortunate, and that means that in turn everyone is affected. Even the wealthy bear a cost, because events like these cost them trust, and bring them undue animosity. Right now the country is being polarized by the great divide between upper and lower classes which these few individuals significantly reinforced; the government is breaking between the strain of the two extremes and serving no one.

The US economic elites have great power, the ability to impact everyone else, which is why it is so important that not even a few of these leaders abuse their position. They will be the only ones to come out ahead while doing the entire country a grievous disservice. To be a nerd and quote Stan Lee, “with great responsibility there must also come – - great responsibility!”
ill lich

Yes, there is a word for this in Japanese, I believe it translates as “honorable.”

American CEO’s don’t know this word.
- Mister44
  
  Yes – every CEO in America has horns and eats babies o_0
  
  Hey – at least we aren’t bitching about Palin, right?
  - Hayduke
    
    “Yes – every CEO in America has horns and eats babies o_0″
    
    Of course not. I know for a fact that American CEOs do not have horns.
  - grimc
    
    No, but an American CEO’s approach would be to grab as much as he could for himself before the whole thing collapsed around him.
    - Mister44
      
      Give me a break. These discussions of late stereotype CEOs as mustache twisting, monocle adjusting, mattress stuffing, candy from baby stealing caricatures one would expect to find in political cartoons with a sash reading “Mr. Moneybags” (of which he would be clutching two).
      
      There are thousands and thousands of companies in the US alone. For sure there are unscrupulous ones and there are underhanded and illegal ones. They are a minority. Not every company is AIG or run by Bernie Maddoff.
      
      I can close my eyes and think of a dozen companies doing good things in the world, making good products, providing good services, etc. I am sure you can too. Gates and Buffet are super super rich, and they give a metric ton load of money to charities and run their own. Steve Jobs has a virtual cult around him. Indra K. Nooyi, God bless her, is doing a brilliant job of making sure my Mt. Dew supply stream goes on uninterrupted.
      
      Furthermore, not every CEO is in the demonized 1% of wealthiest. A majority of them are not. And hey, while mentioning the wealthiest 1%, how many of them are hot movie stars? They aren’t even CEOs of anything.
      
      It’s all just absurdity and knee jerk reactions to conventional “wisdom” and a simplified ‘black and white’ outlook instead of looking at the big picture and seeing the grays.
      
      re: “There oughta be a law– we should make them ALL do this.
      Every CEO, everywhere. ”
      
      Can you imagine anyone saying this about anyone else? Tell us – who else should take the bus/train? Do we have to sit in back or can we sit where we want?
Anonymous

I’m just chiming in to say –

Japan values employment. Sometimes that’s a bad thing — redundant jobs are aplenty in Japan. However, given a budget shortfall an American company would fire 20 workers, and a Japanese company would reduce everyone’s salary by 5%. Both save the same amount of money, but one keeps the jobs.

Speaking of which, the Japanese company my father works for (in the USA) cut everyone in the company’s salary by 5%, and cut all of the management’s by 10% to get through the recession. It also had some buyouts, so you could choose to either take a couple years salary to leave now, or choose to stay and risk a possibly worse future (this was at the height of the recession, so the future was bleak).

Also, I guess the biggest difference between American and Japanese companies is that workers in American companies typically work for themselves (i.e., for their own benefit — they want a stable income), whereas workers in Japan work for their company; if you can all work hard together to make a good company, the money will follow. I guess in that regard, a big Japanese business is similar to an American small business: you are a part of your company, so you should work hard to make it better, and if your company is hurting, everyone should hurt.
TheNipponese

This is strictly PR. You really think the pres of JAL doesn’t know his peer’s salaries? Lets see his face when we tell him Steve Jobs’ salary.
- Tokumei
  
  If it’s PR, it is just as much aimed at employees as it is the public.
  
  But as someone who commuted in Tokyo for years, I think it is more than PR. I’d take the pay cut before the commute any day of the week.
  
  Fact is, Japanese companies were traditionally structured to deal with far less competition, and less aggressive competition, and some of the upper management today still come from that background. That means poor performance in today’s market. The upside being that employers often took their commitment to their employees very seriously.
  
  Top management at Japanese companies today also typically joined the company at the bottom years ago and worked their way up. The hiring of hotshot CEOs from the field is still a very new practice here.
Onecos

Didn’t he get canned a few months back?
Sam125

Good for him. Now if only every other CEO at a money losing company would do the same.
Pantograph

Come on you guys! If the US can have security theatre, why can’t Japan have austerity theatre?
Still, symbolic as it may be, it is a token of respect towards his employees.
Anonymous

If America walks in their footsteps rather than bailing out then USA will be a star.
Anonymous

maybe he’s protecting himself. after all, with a salary that low its hard to see many other ceo’s stepping up to replace him
- MrWednesday
  
  I for one would love to get by on $90k per annum.
Anonymous

That would be former CEO of JAL, since he resigned in shame.

http://www.theglobeandmail.com/report-on-business/fears-rise-about-a-return-of-japan-bashing/article1483437/print/
- teapot
  
  That would be former CEO of JAL, since he resigned in shame.
  
  @Anon #25: You’d think that would be fairly pertinent information to the discussion.