After applying for 1 trillion yen ($12 billion) in public subsidies and raising power rates, Tokyo Electric Power Co. thinks giving summer bonuses to its employees may be a bad idea.
After applying for 1 trillion yen ($12 billion) in public subsidies and raising power rates, Tokyo Electric Power Co. thinks giving summer bonuses to its employees may be a bad idea.
It is considering skipping the bonuses out of the possible negative public reaction they could generate.
The company, which owns the crippled Fukushima No. 1 nuclear plant, provided bonuses in the summer and winter last year at half the previous year’s level.
But the utility says it thinks it should work to cut costs further in order to obtain public support for accepting the public funds and raising utility rates.
The company is expected to notify the labor union of the cancellation of bonuses at an early date.
TEPCO will include the cut into its comprehensive special business plan due to be compiled by the end of April by the company and the government-backed Nuclear Damage Liability Facilitation Fund. The cutback will be part of cost-slashing efforts amounting to more than 3 trillion yen over 10 years.
Due to the Fukushima accident, TEPCO posted a consolidated net loss of 1.2473 trillion yen for the year ending March 2011 and predicts a loss of 695 billion yen in the fiscal year ending in March this year.
The utility raised rates for business users by an average 17 percent from April and plans to apply for new household rates around 10 percent higher. But users reacted sharply to the proposed increases, saying TEPCO should first reduce costs.
According to a government response in writing at a Cabinet meeting, disclosed on April 3, the average amount of executive compensation for TEPCO board members, excluding representative executives, stood at as high as 15 million yen per person per year even after the nuclear accident.
The disclosure was in response to a questionnaire by Taro Kono, a Lower House member belonging to the opposition Liberal Democratic Party.
According to the response, 10 board members received an average of about 30 million yen each in remuneration in fiscal 2010, before the accident, but after that, the figure dropped by half. The average compensation for the seven TEPCO top executives of the chairman, the president and the vice presidents was 47 million yen each in fiscal 2010.
But they have received no compensation since the accident. Directors have also not been paid bonuses since fiscal 2008.