Top executives at Nomura Holdings Inc., including CEO Kentaro Okuda, will take temporary pay cuts following a high-profile criminal case involving a former employee, the Japanese investment bank announced on Tuesday.
Okuda, who also serves as president of Nomura's domestic securities unit, will forgo 30% of his salary for three months, with other senior managers taking similar reductions. This comes as the firm aims to address recent scandals that have tarnished its image amidst a period of profit growth.
The incident in question involved a 29-year-old former Nomura employee who was charged last month with drugging and robbing an elderly client and their spouse, and setting their home on fire. The suspect, who worked in the firm's wealth management division, has since been dismissed.
"We deeply apologize to the victims and all those affected," Okuda said at a Tokyo news briefing, where he and other top managers bowed in unison. "We are truly sorry." Okuda acknowledged potential cultural issues within the company and pledged to take the matter seriously.
In response, Nomura has introduced measures to detect and prevent employee misconduct, including:
- Strengthening supervision of client home visits
- Seeking broader feedback on employees, including from colleagues
- Improving recruitment processes and conducting ethics training
This is Okuda's second recent pay cut, following a 20% reduction for two months after Japan's financial regulator fined Nomura for government bond futures market manipulation. Despite these scandals, Nomura's shares have climbed 47% this year, driven by buoyant financial markets.
Earlier on Tuesday, Okuda apologized for the incident at an annual investor forum, pledging to implement remedial steps. Some investors remained optimistic about the firm's future, emphasizing the importance of preventive measures.
Nomura's wealth management operations could potentially be impacted by the Hiroshima case, as home consultations are common in Japan. The Financial Services Agency has urged Nomura to investigate the incident's cause and prevent similar cases.
The former employee joined Nomura in 2018 and provided asset management advice to clients at the Hiroshima branch. Nomura learned of the incident after the employee reported police suspicions and cooperated fully with the investigation. The firm dismissed the employee on August 4.