Saturday, July 20, 2024
HomeBusinessMegabanks Mitsubishi UFJ and Sumitomo Mitsui introduce stock compensation for employees; ...

Megabanks Mitsubishi UFJ and Sumitomo Mitsui introduce stock compensation for employees; Plans to stimulate motivation and leadership

Yomiuri Shimbun file photo
The MUFG Bank logo

Large banks are increasingly compensating employees with company shares. Mitsubishi UFJ Financial Group, Inc. and Sumitomo Mitsui Banking Corp. will introduce a system this financial year to transfer shares to employees based on the points they receive. By introducing a reward system that is linked to company value, they want to increase employee motivation.

Mitsubishi UFJ Financial Group will award points to 5,600 managers of its three main subsidiaries: the bank, the trust bank and the securities company, provided they meet certain requirements. After a certain three-year period, employees can receive shares equal to a certain percentage of their points. It is expected that the requirements will also include evaluations during the period. If the stock price rises, the profit from selling the stock will increase. Mitsubishi UFJ Financial Group hopes this will “provide opportunities to exercise leadership.”

Sumitomo Mitsui Banking will use shares of its publicly traded parent company, Sumitomo Mitsui Financial Group, Inc., as compensation. Employees receive this at the time of retirement, based on the points added based on the compensation rate and the company’s performance. The system will involve around 350 senior employees, including head office department heads and branch managers, and the company is considering expanding it to other senior employees across the group.

The reason for receiving the shares upon retirement is to motivate employees to grow the company with a long-term perspective. If the shares are treated as retirement income, there are also tax benefits.

Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking will purchase the shares to be transferred through their trust banks. The moves by these two companies could impact the compensation systems of other major and regional banks.



Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments

Translate »