Nomura CEO takes pay cut after former employee charged with attempted murder

(Bloomberg) — Nomura Holdings Inc.’s chief executive and other senior managers will take pay cuts as the Japanese investment bank announced a series of remedies after a former employee was accused of robbery and attempted murder.

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CEO Kentaro Okuda, who is also president of Nomura’s domestic securities division, will pay back 30% of his salary for three months, the company said in a statement Tuesday as he prepared for a news conference. Other executives will take similar cuts.

The incident in Hiroshima, western Japan, is one of two scandals that have rocked Nomura’s reputation recently. Prosecutors filed charges against the 29-year-old, alleging he drugged an elderly customer and his wife, stole cash from their home and set it on fire. The suspect was working for Nomura’s asset management division at the time of the incident in July and has since been fired.

In response to the incident, Nomura announced a series of measures to detect employee misconduct at an early stage. This included greater monitoring of visits to customers’ homes and obtaining more comprehensive feedback from workers.

Okuda told an annual investor meeting earlier in the day that he was sorry about the matter but vowed to take both short- and longer-term steps to prevent a repeat.

“We would like to deeply apologize for the great inconvenience and worry we have caused to our customers and stakeholders,” Go Sugiyama, head of asset management, said at the Nomura Investment Forum.

Sugiyama said Nomura would take a number of measures to prevent a recurrence, such as having managers speak directly to clients before wealth management staff visit their homes. His team will also “further strengthen” various steps already taken to prevent irregularities, including compliance and ethics training for employees, he said.

As Bloomberg reported last month, Japan’s financial regulator asked Nomura to investigate the cause of the incident and take measures to prevent similar cases.

The development is the latest example of Nomura finding itself in the regulator’s crosshairs. Separately from that case, the Financial Services Agency fined Nomura in October for manipulating the 2021 Japanese government bond futures market. The revelations, for which Okuda apologized, prompted some clients to outsource bond trading and underwriting business to competitors , although some have since returned to Nomura.

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