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Mitsubishi Motors to introduce merit pay, streamline management

Chairman Ghosn prioritizes results in plan to revive troubled automaker

TOKYO -- Mitsubishi Motors will pay and promote executives based on merit and refine its management structure, prioritizing results in reforms spearheaded by new Chairman Carlos Ghosn, known for his role in righting the ship at Nissan Motor.

The scandal-hit Mitsubishi Motors will welcome new board members, including Ghosn, as it inaugurates its reorganized management at a special shareholders meeting Wednesday. The new measures are top priorities in the Japanese automaker's revival plan, and were centerpieces of the Nissan Revival Plan Ghosn presented in 1999.

Until now, Mitsubishi has paid executives fixed salaries according to their duties, in a system that tended to reward seniority. From now on, remuneration will be determined by how well an executive's branch performs compared to its fiscal-year plan. The automaker aims to implement merit-based pay for regular employees in the future.

In its new management structure, the company will have not only chief operating and chief financial officers, but a chief performance officer, tasked with keeping the company on course to meet profit goals. Officers will be appointed to oversee the company's development and production divisions as well.

Some responsibilities that had belonged to the president will be delegated to top executives in order to speed up and clarify accountability in the decision-making process. Moreover, starting in January, the company will abolish assistant and deputy management positions. With fewer steps on the executive ladder, it will be easier for the concerns of employees to reach top brass. In Mitsubishi's development division, for example, it takes five steps for a report from the section head to get to the company's executive vice president.

(Nikkei)

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