Compensation: Motown's Fat Cats

The trip was billed as a global showdown, an expedition designed to "level the playing field," as American businessmen are wont to say. Yet even before George Bush's new 747 touched down at Tokyo's Haneda Airport, Japan and its supporters had deftly weakened the American campaign to win trade concessions by raising a touchy issue: large disparities in the money paid to American CEOs and their Japanese counterparts.

Under particular scrutiny, naturally, were the salaries and perks of the three U.S. auto-company chiefs -- Chrysler's Lee Iacocca, Ford's Harold Poling and GM's Robert Stempel -- all of whom accompanied the President to Tokyo. The three were paid a total of $7.3 million-plus in 1990, including more than $4 million in stock incentives.

By contrast, the heads of Japan's Big Three -- Shoichiro Toyoda of Toyota, Nobuhiko Kawamoto of Honda and Yutaka Kume of Nissan -- earned a total of $1.8 million, counting bonuses. Moreover, while the Japanese execs are presiding over thriving enterprises, the U.S. auto industry is coming off one of its worst years ever. Sales of American-made cars plunged 12.6%, to 8.7 million, in 1991; more than 40,000 autoworkers lost their jobs, and GM announced plans to eliminate 74,000 jobs by 1995; and the Big Three rolled up financial losses that analysts predict could exceed $6 billion.

Put immediately on the defensive, the American auto executives were quick to argue that while they made a lot of money (Iacocca even admitted his pay was "too high"), their Japanese counterparts got more in compensation than met the eye. Claims Iacocca: "Don't feel sorry for the Japanese ((executives)). They make a lot of money. They have a lot of perks. They get bought $3 million houses. They have million-dollar golf-club memberships." His clear implication: when everything is tallied up -- salaries, bonuses and perks -- Japanese and American executives are neck and neck.

Not so. To be sure, Japanese companies offer executives substantial perks. And Japanese securities laws do not require companies to report details of such compensation. But the available evidence does not point to the hidden trove that the men from Motown suggest.

At Toyota, Shoichiro Toyoda is provided with membership in several elite golf clubs. Kume of Nissan receives a company-rented house in a posh Tokyo neighborhood. Nissan also provides its 47 board members with free use of a vacation home in Hakone, a mountain and lake resort area south of Tokyo. Liberal expense accounts routinely cover pricey meals and bar bills that can add up to $1,000 a head for a night out.