While the average summer bonus at major companies exceeded ¥1 million to reach a record high, reports indicate that wage growth for employees in their 40s and 50s is slowing, prompting a fresh look at annual income around age 50. The reports also covered starting salary inflation and surging executive compensation.
The average summer bonus at major companies reportedly reached its highest level since 1981, with summer bonuses exceeding ¥1 million for the first time, based on an announcement by the Japan Business Federation. This has prompted views that conventional pay structures are being reassessed.
Estimated annual income at age 50 was calculated for listed companies, and the top 100 companies were ranked by estimated income at age 50. The estimates were calculated based on information disclosed in securities reports and wage-curve data, and the report cited the possibility that age 50 represents the peak of the wage curve.
The gap between compensation at age 50 and executive compensation has become more apparent. While estimated annual income at age 50 is approximately ¥20 million–¥30 million, executive compensation can reach several hundred million yen to more than ¥1 billion in some cases. At global companies, compensation can reportedly be more than ten times that of regular employees.
As the expansion of job-based employment accelerates a review of lifetime employment and seniority-based pay, the report presented the view that companies need to shift toward compensation structures that make use of employees’ expertise. It also pointed to the possibility that future wage curves will flatten.