The Wall Street Journal reports on how corporate executives at Japanese companies with seniority-based promotion make far less than those at U.S. and European corporations with performance-based systems:

The gap is huge, as Mitsubishi UFJ Financial Group can attest. Japan’s biggest bank by market capitalization, paid a total of $8.1 million for 14 top executives in the fiscal year ended March 31, according to a regulatory filing.

But at Morgan Stanley, in which MUFG acquired a 21% stake in September, John Mack, the chief executive, alone took home five times that amount — $41.4 million — in the year ended Nov. 30, 2006. His pay was cut to $1.6 million last year after the company posted a quarterly loss and he declined a bonus.

On average, chief executives at Japanese companies with more than $10 billion in annual revenues are paid about $1.3 million a year, including bonuses and stock-option grants, according to Towers Perrin, a consulting firm, based on data gathered between 2004 and 2006. But chiefs in the U.S. are paid about $12 million, and chiefs in Europe are paid $6 million.

[hat tip to Brian]

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