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Executive Compensation: A Comparison of the United States and Japan

Creative Benefits, Inc.

Gangaram Singh

San Diego State University

This article compares executive compensation in the United States and Japan. It describes the components that make up the total compensation package for each country and the development of the packages. It also analyzes current trends related to each country's executive pay schemes and presents some predictions for the future of CEO compensation. Based on the information provided in this article, it is difficult to contest the fact that American CEOs currently earn quite a bit more than their Japanese counterparts. Several of the reasons for this discrepancy are outlined. Although it can be argued that the CEO compensation model used in Japan is beginning to resemble the model used in America, tremendous strides will need to be taken before the pay gap between the two countries is narrowed.

Key Words: executive compensation • compensation • international human resource management • human resource management

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