High executive pay has angered shareholders again this year, with Credit Suisse foremost among those taking the heat and having to slash executive bonuses as a result. But critics of high pay face an inconvenient example of how clamping down on remuneration can hold companies back: Japan.

In Japan, company bosses are paid a fraction of what they get in the West. The use of share awards and bonuses is minimal. And companies, as well as the wider economy, seem to suffer for it.  Now some Japanese companies, under pressure from the government, are moving in a Western direction on pay and governance.