TOKYO (Reuters) - Japan’s relationship with state-backed Japan Investment Corp (JIC) has been damaged by excessive pay demands, an economy ministry official said on Monday.
JIC Chief Executive Masaaki Tanaka walked out of a Nov. 24 meeting to discuss remuneration levels at the investment fund, which was formed in September to manage more than $17 billion of public money, ministry official Keisuke Sasaki said.
JIC is seeking annual compensation of about 55 million yen ($480,000) for Tanaka and top management, Sasaki said, adding that this is higher than the Bank of Japan governor’s 35.3 million yen and the 31.5 million yen paid to the president of the Government Pension Investment Fund (GPIF).
“Trust between the ministry and JIC’s Tanaka has been damaged,” Sasaki said. “It is difficult for the government to ask JIC to manage 2 trillion yen.”
Takaka, a former deputy president of Mitsubishi UFJ Financial Group, said in October that JIC plans to set up funds with private equity firms, sovereign wealth funds and institutional investors.
JIC said in a statement on Monday that the compensation it sought was the same as offered by the Ministry of Economy, Trade and Industry.
Sasaki acknowledged that the ministry had previously offered to pay as much as 55 million yen to JIC’s top management but rescinded that offer last month and asked the fund to reconsider salary levels.
($1 = 113.5800 yen)
Reporting by Junko Fujita; Editing by David Goodman