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STRUCTURED PRODUCTS | Cesar Tordesillas, Japan
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Mitsubishi UFJ pushes new trust product

Mitsubishi UFJ Trust and Banking Corp. hopes to boost sales of a new trust product designed for domestic firms with overseas offices.

Under the new program at Mitsubishi UFJ Trust, companies conclude a trust contract with their employees designated as the beneficiaries.

The bank manages their stocks on behalf of the employees regardless of their place of residence.

Employees receive their retirement benefits and bonuses in the form of equities or cash equivalent to the value of the stocks. If they choose to receive cash, there is no need for a securities account.

Unlike conventional stock options, the new trust-based plan doesn't require employees to open an account at a securities firm in Japan, making it easier for locally hired workers at overseas offices to receive their remuneration.

The company expects the plan to help domestic companies recruit better talent in the increasingly competitive global market in such areas as information technology and manufacturing.

Stock options are a common remuneration package in the United States and other countries. In Japan, 40 percent of listed companies have introduced the incentive mechanism. Yet due to constraints, such as the need for a securities account, the domestic version appears less attractive to local employees at overseas offices.

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