Osamu Ebihara belongs to the older generation of Japan’s Wnancial executives, not yet an endangered species list, but maybe heading that way within a generation as the Wnancial revolution begins to bite. He is one of the breed of bright Wnancial executives who joined a company for life, literally. After graduating from the elite Tokyo University, Ebihara joined Mitsubishi Corporation, where he rose to be the finance director with a seat on the main board. Now 64, he “retired” from the board a few years ago but is still very much a company man.
He keeps an office in the trading company’s Tokyo headquarters in Marunouchi. More important, he continues to collect a regular director’s pay cheque from Mitsubishi and will do so until he is 70.
He is actually far from retired. Besides his Mitsubishi office, he has two others he uses regularly. He is administrator of Nippon Asset Management, which took over what was left of the bankrupt Japan Leasing Corporation when GECC bought the leasing business and name. He is adviser to Japan Tobacco and also advises foreign companies, including Phoenix Securities and Simon Murray. Whatever money he earns from his other work is handed over to Mitsubishi. These days, he jokes, he’s giving more money to Mitsubishi than he is getting back through his director’s salary.
But Ebihara says he feels part of a past generation. The shift away from lifetime employment is being very much driven by bright financial executives lured to foreign investment banks. There they get the opportunity to make money early and the prospect of responsibility and of being at the cutting edge of exciting new Wnancial developments, including the mergers and acquisitions that were unheard of in the old Japan Inc.
The old lifetime employment system was slow and plodding. By their mid-50s managers might be trusted to go on the main board. Any dreams of the president’s chair had to be postponed until their late 50s or early 60s. Financial executives were very much outsiders in the traditional Japanese company.
Companies bred totally loyal men – women were encouraged to resign when they had children, if not on marriage. Executives, having sold their lives, could look forward to being looked after even after retirement. In most cases they would be found retirement jobs with sister or associate companies. One senior manager of the then Bank of Tokyo eventually found his final retirement job in his 70s as an accountant for a chain of garages. A few companies even provided corporate graves.
In the private sector changes are beginning to bite. “When I graduated, Mitsubishi Corporation was regarded as a great job that attracted the best young people because it was part of the Japanese establishment,” recalls Ebihara. “But these days it is regarded as just another trading company. Now that the system is changing and Japan is experiencing labour mobility as never before and young executives can see the opportunities of changing jobs. I have been spending some of my time telling the young people at Mitsubishi that they can enjoy a good career and it is worth staying with the company.”
Foreign investment bankers conWrm that the Wnancial revolution is playing a particularly important part in shaking up the old established ways. US investment banks such as Merrill Lynch, Salomon Smith Barney, Morgan Stanley Dean Witter and Goldman Sachs now lead the Wnancial tables for Japanese international corporate issues. Staff at the US houses have increased by leaps and bounds.
The new staff helping the Tokyo oYces of the Wall Street houses to new proWts are mainly Japanese. A good number are women, who would long ago have hit the glass ceiling had they tried to aspire to the same opportunities inside corporate Japan.
The government bureaucracy has been slower to seize the opportunities that the new Wnancial Xexibility offers – though talented women once accepted in government service may have better opportunities than their sisters in the private sector. But bureaucrats have suffered from the Wnancial failures and mergers and consolidations that have started to occur. The tradition was that top Wnancial bureaucrats retired in their late 50s and went on to good jobs in the private sector. The process is called amakudari (literally descent from heaven).
But these jobs, which might pay anything between three and eight times the salary that the man earned as a bureaucrat, are harder to come by these days. Not only are there fewer jobs to go to, but the Wnancial institutions, seeing that Wnance ministry policies have led them into diYculties, are less prepared to offer lucrative soft landings. In consequence, Ebihara jokes that there are a lot of retired bureaucrats stuck in a sort of air traYc control jam circling while waiting for a vacant slot.
