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JAPAN

SALARY GUIDE

2015

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morganmckinley.co.jp

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MANAGING DIRECTORS LETTER

The majority (60%) of permanent employees who responded to the 2015 Morgan McKinley Salary Survey, say they have received an increase in their annual salary. However, most of these have been relatively moderate uplifts of between 1-8 percent. This is a result of companies continuing to be under tight constraints when it comes to budgets and headcount. However, in-demand professionals with the right skills and experience can command larger increases in salary. Most (77%) Japanese professionals in permanent work surveyed have received or are expecting to receive an annual bonus this year. However, any increase in bonus payment remains relatively flat, with the majority (58%) reporting bonus increases of between 1-8 percent. The contract market continues to grow across all sectors in Japan, with more companies offering contract roles and increasing numbers of professionals being open to this arrangement. Organisations continue to value the flexibility this gives them to tackle short-term needs, and it is often easier to gain headcount approval for contract staff and temp-to-perm arrangements, which provide both sides with the opportunity to see if the fit is right. For professionals it can also provide flexibility, varied work experience and network building.

MANAGING DIRECTOR Tel: +81 3 5403 7064 | lionel@morganmckinley.co.jp

LIONEL KAIDATZIS

Contract rates are steadily increasing as it becomes ever more popular for companies to hire staff on this basis. The majority (64%) of Japanese contract and temporary workers, who responded to the 2015 Morgan McKinley Salary Survey, say their contract rate or salary has increased in the last year. I hope you enjoy reading the detailed report. If you have any thoughts on current salary trends in professional occupations in Japan, we would be very interested to hear from you.

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CONTENTS

BANKING & FINANCIAL SERVICES 5 Front Office 6

Compliance 7

Finance, Audit & Risk 8

Operations and Project /

Change Management 9

FINANCE & ACCOUNTING 10

Finance & Accounting 11

IT 13

ASSET MANAGEMENT 17

HUMAN RESOURCES 19

SALARY SURVEY RESULTS 21

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BANKING & FINANCIAL SERVICES

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BANKING & FINANCIAL SERVICES

FRONT OFFICE The majority of global investment banks and commercial banks increased headcounts in 2014, as political stability and a weaker Yen benefited Tokyo's financial services sector. Growth in equity sales and trading stabilised after a significant upswing in 2013. Whilst there was movement across equity businesses following bonus payments, this was not at an aggressive rate. 2014 was a year of careful and calculated expansion for fixed income sales and trading. There was notable hiring in senior Japanese Government Bond sales areas.

The Investment Banking division (IBD) business showed some encouraging growth signs, with

THE MAJORITY OF GLOBAL INVESTMENT BANKS AND COMMERCIAL BANKS INCREASED HEADCOUNTS IN 2014

moderate increases in analyst to associate headcounts. The majority of professionals were hired through the banks entry level group hiring programs. There was robust hiring activity among global corporate banks. Corporate banking relationship managers and transaction bankers were areas with the most demand. Private equity had moderate growth, particularly in associate level hiring.

ROLE: ANALYST ASSOCIATE VP DIRECTOR MANAGING DIRECTOR FIXED INCOME SALES 6M - 9M 7M - 15M 14M - 23M 18M - 30M 25M - 45M

FIXED INCOME TRADING 6M - 9M 7M - 16M 15M - 23M 20M - 33M 25M - 45M

EQUITY SALES 5M - 8M 7M - 13M 13M - 22M 17M - 28M 25M - 35M

EQUITY TRADING 5M - 8M 7M - 14M 15M - 20M 18M - 30M 25M - 40M

EQUITY RESEARCH 5M - 8M 7M - 13M 13M - 20M 17M - 25M 25M - 45M

DERIVATIVE STRUCTURING 5M - 8M 7M - 13M 14M - 20M 17M - 32M 25M - 35M

FX / COMMODITIES 6M - 12M 8M - 18M 15M - 25M 20M - 30M 25M - 35M

IBD COVERAGE BANKING 5M - 11M 8M - 15M 18M - 22M 22M - 30M 30M - 35M

ECM / DCM 5M - 11M 8M - 15M 18M - 22M 22M - 30M 30M - 40M

M&A PRODUCT SPECIALIST 6M - 12M 9M - 18M 18M - 25M 25M - 32M 30M - 40M

STRUCTURED FINANCE / SECURITISATION 5M - 9M 7M- 12M 12M - 16M 17M - 25M 22M - 35M

PRIVATE EQUITY 7M - 10M 9M - 15M 13M - 17M 18M - 25M 20M - 40M

CORPORATE BANKING RELATIONSHIP MANAGERS 6M - 8M 9M - 11M 12M - 15M 15M - 20M 18M - 25M

TRANSACTION BANKING (CASH MANAGEMENT & TRADE FINANCE)

6M - 8M 9M - 11M 12M 15M 15M - 20M 18M - 25M

STRUCTURED & PROJECT FINANCE 6M - 8M 9M - 11M 12M - 15M 15M - 20M 18M - 25M

FRONT OFFICE | PERMANENT (BASIC SALARIES, MILLION PER ANNUM)

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BANKING & FINANCIAL SERVICES

ROLE: ANALYST / NON-OFFICER ASSOCIATE /

AVP / MANAGER

VP / SENIOR

MANAGER

SVP / DIRECTOR

DIRECTOR / SENIOR

DIRECTOR

COMPLIANCE

CORE / CENTRAL COMPLIANCE 6M - 8M 9M - 13M 14M - 18M 19M - 22M 22M+

TRADE SURVEILLANCE / MONIROTING 6M - 8M 9M - 14M 15M - 18M 19M - 22M 22M+

CONTROL ROOM 7M - 9M 9M - 14M 15M - 18M 19M - 24M 25M+

ADVISORY - 12M - 16M 17M - 20M 22M+ 25M+

COMPLIANCE | PERMANENT (BASIC SALARIES, MILLION PER ANNUM)

COMPLIANCE Tokyos compliance market was very active during 2014, with the majority of hires between associate and vice president level. There has been less activity at head of function and chief compliance officer level. The contract market is stable, with most hires in supporting administrative roles. The lack of junior (newly qualified) talent in the Japanese financial services sector means that investment banks often need to turn to other functions such as operations, front office and risk management, or even look at candidates from the Big Four in order to fill vacant posts. In some instances, banks have had to look at relocating compliance staff on secondments to Japan from overseas offices. A rise in trading related probes in recent months, together with new legal and regulatory changes highlights the need for investment banks in

TOKYOS COMPLIANCE MARKET WAS VERY ACTIVE DURING 2014, WITH THE MAJORITY OF HIRES BETWEEN ASSOCIATE AND VICE PRESIDENT LEVEL

Japan to hire more professionals across all areas of central compliance, trade surveillance, control room and compliance advisory. We expect this trend to continue in 2015, with compliance professionals in high demand. Basic salaries at analyst to assistant vice president level will continue to increase in 2015, and compliance professionals at vice president level can expect to command salary increases of 20 percent and above.

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BANKING & FINANCIAL SERVICES

FINANCE, AUDIT & RISK The control functions within banking and financial services continue to recruit actively. Aside from financial accounting where most hires are replacement hires, there has been significant hiring in product control at select tier one banks that maintain a team of 20 to 40 controllers onshore. There is also a strong appetite from banks for junior talent at analyst and associate level. These trends create opportunities amongst a wide range of accounting professionals that include; product controllers, MBA graduates and Big Four professionals. Banks are also keen to attract junior financial accountants, within asset management or insurance companies, who are eager to develop a career in product accounting.

THE INTENSIFICATION OF REGULATORY REQUIREMENTS TO STRENGTHEN BANKING CONTROLS HAS CREATED NEW ROLES IN OPERATIONAL RISK

The internal audit function has also been a hot area of recruitment for business auditors at associate and manager levels. The candidate pool for auditors possessing a strong investment banking business sense remains narrow. Investment banks in Tokyo are resorting to hiring financial and product accountants, as well as developing talent internally. Within risk management, credit risk saw a limited number of hires in 2014. Credit risk teams appear to be very stable and experienced minimal turnover. Operational risk, market risk and liquidity risk continue to be very active. The intensification of regulatory requirements to strengthen banking controls has created new roles in operational risk. Similarly, the implementation of Basel III has created new roles in market liquidity risk. Professionals working in finance, audit and risk - also considered the banks first line of defence - will continue to be in high demand, commanding basic salary increases in 2015.

ROLE: ANALYST / NON-OFFICER ASSOCIATE /

AVP / MANAGER

VP / SENIOR

MANAGER

SVP / DIRECTOR

DIRECTOR / SENIOR

DIRECTOR FINANACE

MANAGEMENT ACCOUNTING 6M - 7M 8M - 12M 13M - 15M 16M - 19M 20M+

FINANCIAL CONTROL 6M - 8M 8M - 13M 14M - 18M 19M - 22M 22M+

PRODUCT CONTROL 6M - 8M 9M - 13M 14M - 18M 19M - 22M 22M+

VALUATION CONTROL 6M - 8M 9M - 14M 15M - 18M 19M - 22M 22M+

TAX 5M - 7M 8M - 13M 14M - 18M 19M - 22M 22M+

AUDIT

IT AUDIT 6M - 8M 9M - 13M 14M - 18M 18M - 20M 20M+

INTERNAL AUDIT 6M - 8M 9M - 13M 14M - 18M 19M - 24M 24M+

RISK MANAGEMENT

OPERATIONAL RISK 6M - 8M 9M - 13M 14M - 18M 19M - 22M 22M+

CREDIT RISK 6M - 8M 9M - 13M 14M - 18M 19M - 22M 22M+

MARKET RISK 6M - 9M 10M - 14M 15M - 20M 20M - 25M 25M+

QUANTITATIVE RISK 8M - 10M 11M - 15M 16M - 20M 20M - 25M 25M+

FINANCE, AUDIT & RISK | PERMANENT (BASIC SALARIES, MILLION PER ANNUM)