Sony CEO Kaz Hirai Taking 50% Pay Cut, Other Execs to Follow Suit

Sony CEO Kaz Hirai Taking 50% Pay Cut, Other Execs to Follow Suit

Sony Logo

Sony CEO Kaz Hirai along with other Sony executives will reportedly take a massive pay cut and withhold from getting their bonuses due to the company posting its fourth annual loss in five years.

While the PlayStation 4 might be selling like hotcakes, that hasn't been enough for Sony to turn things around as the company revealed that it expects to post a $1.27 billion loss for the 2013 fiscal year. This is a stark contrast to Sony's earlier prediction of turning a $489 million profit it expected to earn in 2013. According to the Wall Street Journal, with the company posting an annual loss for the fourth time in five years, ex-PlayStation boss and now Sony CEO Kaz Hirai is preparing to take a massive 50% pay cut while also declining his annual bonus. Not only that, but as a sign of solidarity, other unnamed high-level Sony executives will also follow suit.

Sony's losses are mostly accounted to the firm's unprofitable PC division which is in the process of being sold off. The WSJ report also mentions that Sony's other divisions such as the 4K TV line, and resurrection of its Walkman digital music player have also struggled to turn a profit. Over on the video game front, the company's PlayStation brand is performing very well. But even with the PS4's impressive sales figures and projections of selling 20 million PlayStation devices in the 2014 fiscal year, the PlayStation brand is still trailing behind where it was six years ago prior by 45% in terms of total hardware units sold.

Interesting to note that Hirai's pay reduction move is similar to Iwata's pay cut earlier in the year due to the Wii U's failings. While it's sad to see the electronics giant struggling, it's refreshing to hear that its president and other executives are willing to take a significant pay cut rather than letting most of its lower-level staff take the fall.

What should Sony do to turn a profit once more? In your opinion, aside from its PC division, what other branches of the firm should be cut to save money?

Source Wall Street Journal via IGN

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If only American executives can follow this kind of sacrifice, but who am I kidding that will never happen.

Japanese execs are in the business for more than just money. There's a pride factor involved in running a company successfully. American businessmen would rather let the company die than give up their bonuses and take a salary cut. Which is insane since you shouldn't get a bonus if you're an abysmal businessman.

And just like that, we know why Jack Tretton stepped down as head of Playstation. (Left? Is Leaving? I'm not 100% sure)

I would wonder if Sony's financial strife is what has led to so many high level people leaving their major studios. Sucker Punch, Naughty Dog, Sony Santa Monica, and the studio building Drive Club all had major project leaders step down in the last few months. Maybe they just weren't willing to take the pay cut?

Interesting stuff. I hope they turn it around.

The 4k t.v's will be good, in about 7 - 10 years. Right now, there is no reason (outside a few specialized fields) that would justify owning one. Blu-Ray only does 1080. Maybe if they released a player that did 4k upscaling (and did it well), then they might see better(?) sales in the home market.

008Zulu:
The 4k t.v's will be good, in about 7 - 10 years. Right now, there is no reason (outside a few specialized fields) that would justify owning one. Blu-Ray only does 1080. Maybe if they released a player that did 4k upscaling (and did it well), then they might see better(?) sales in the home market.

http://store.sony.com/sony-dual-core-blu-ray-disc-player-4k-upscaling-zid27-BDPS6200/cat-27-catid-All-Blu-ray-DVD-Players;pgid=ddhO0Thw37NSRpr10sY3_4MB00005I1_VNVt;sid=2kka7e5wQCM_7b0BM5e66XZ6tQVfnIE8nzgctJci

There you go Sony Blu-ray that upscales to 4K.

What Sony really need to do is spin-off the TV side of the business.

I wish the city of corruptions (London) execs would follow this model and trend. They seem to get increased bonuses when profits take a massive drop.

I'm not sure why they are struggling...I know they are involved in other areas of business and not just electronics. But there doesn't seem to be anything wrong with the electronics side of things in my eyes. I plug the products in, they work. What more could I ask for?

Adam Jensen:
American businessmen would rather let the company economy die than give up their bonuses and take a salary cut.

Fixed that for ya.

Even when the global economy was bleeding out like a beached whale executives from both America and Europe were still getting ludicrous bonuses.

Taking a pay cut must be Japanese corporate equivalent to cutting off a pinky.

At least they take their responsibility. Even here in "socialist" Europe CEO's who are forced to take a cut manage to rile up all manner of politicians to shout out how "unfairly" they're being treated, after all no one can deny that they're the best for the job exactly because they get that pay, therefore they deserve that pay!... right?

Even with a successful console launch they are still have issues, hopefully they will sort themselves out.

I like how nobody says Sony is doomed when Kaz takes a 50% pay cut. On the other hand, Iwata does the same thing, and people are quick to call "Nintendoom".

You know, I kind of wish western companies would do this, as opposed to just being greedy assholes who want to slice hours and fire employees because a third of the company's profits isn't going into their pocket.

Well, I've said when Iwata took the pay cut and I'll say it here: I'm glad that the CEO is willing to cut his own pay in order to prove that he cares about the company. While I know that his pay won't cover any percentage of the losses the company has made, it is a sign of good faith to show that even the CEO is (metaphorically) suffering along with his employees. I hope Sony gets their act together as well. As much of a Nintendo Defense Force General I am, I am a fan of the Playstation and enjoy their products.

Oh. They are also also forfeiting yearly bonuses. That's better than just the salary considering, in big American corporations, the bonuses can be several times the size of the same person's yearly salary. And those execs will get them even as their respective companies have repo men combing through the office's IT assets to cover the bankruptcy debts.

I am happy they did this. It's the same reason I don't particularly want Iwata out of Nintendo(as long as they turn it around sometime before the Four Horsemen ride). If enough high profile execs could set this precedent and show the world that taking execs taking pay cuts and remaining with the company can help turn it around without sacrificing the low level workers who have no golden parachute and no industry connections to get another job, much less a 6 or 7 figure one, again in months, then maybe this economy can turn around and recessions wouldn't be hurt so much. Tough chance on that, though.

ZZoMBiE13:
And just like that, we know why Jack Tretton stepped down as head of Playstation. (Left? Is Leaving? I'm not 100% sure)

I would wonder if Sony's financial strife is what has led to so many high level people leaving their major studios. Sucker Punch, Naughty Dog, Sony Santa Monica, and the studio building Drive Club all had major project leaders step down in the last few months. Maybe they just weren't willing to take the pay cut?

Interesting stuff. I hope they turn it around.

He might have really been skittish about the company's future, but I think he had more reasons to leave. (Legitimately wanting to take a break to be with the family? A new job offered by a company not circling the drain? Maybe he really is greedy and would rather get that gilded hang glider before it shrinks into nothing? Who knows?) If Sony did go down the tubes, the Playstation subsidiary would be sold off, and whoever bought it would have been smart enough to listen to Trenton and other execs on how the new owners shouldn't change much, if anything, to keep their new investment profitable. No one in the upper Playstation ranks should be afraid of losing their jobs, and they could always jump ship with the hefty severance pay if they hate the new ownership.

The others in the studios? They probably really aren't getting any info on Sony's future plans and are jumping at any opportunity presenting itself to leave before Sony does get desperate and foolish enough to sell off assets in its one profitable sector. Many of them probably have many ends to meet (house/car payments, tuition for the kids, maybe even their own student loans) and can't risk being without a job for more than a couple months.

Were I terribly interested, I'd keep a close eye on this. Reason being, I'm from the Caribbean and decades ago during election season, the opposing party proposed a "ludicrous" means of saving money if elected. The governing party called them out on it saying that they were bullshitting the people, the budget that they set could not be realistically met. I don't remember if it was before, or after the party was elected that the Prime Minister revealed his plan: "Everyone in the party took a salary less than what the law stated was the minimum." The money that would have been paid to them was then, supposedly, allocated to "the people."

However, the following year, everyone in the party received raises that took their salaries to higher than what it would have been had they not taking the "pay cut" in the first place. So whenever I learn of situations like this I think "let's wait and see." Good on them if it's on the up and up, but let's see if this is a part of some "long con" to give themselves pay hikes later.

Hairless Mammoth:
snip

ZZoMBiE13:
And just like that, we know why Jack Tretton stepped down as head of Playstation. (Left? Is Leaving? I'm not 100% sure)

I would wonder if Sony's financial strife is what has led to so many high level people leaving their major studios. Sucker Punch, Naughty Dog, Sony Santa Monica, and the studio building Drive Club all had major project leaders step down in the last few months. Maybe they just weren't willing to take the pay cut?

Interesting stuff. I hope they turn it around.

He might have really been skittish about the company's future, but I think he had more reasons to leave. (Legitimately wanting to take a break to be with the family? A new job offered by a company not circling the drain? Maybe he really is greedy and would rather get that gilded hang glider before it shrinks into nothing? Who knows?) If Sony did go down the tubes, the Playstation subsidiary would be sold off, and whoever bought it would have been smart enough to listen to Trenton and other execs on how the new owners shouldn't change much, if anything, to keep their new investment profitable. No one in the upper Playstation ranks should be afraid of losing their jobs, and they could always jump ship with the hefty severance pay if they hate the new ownership.

The others in the studios? They probably really aren't getting any info on Sony's future plans and are jumping at any opportunity presenting itself to leave before Sony does get desperate and foolish enough to sell off assets in its one profitable sector. Many of them probably have many ends to meet (house/car payments, tuition for the kids, maybe even their own student loans) and can't risk being without a job for more than a couple months.

Yeah. I know I was being a bit reductive. But I honestly didn't mean it as a slam against ol' Jack. Tretton did a great job for Playstation and I'm truly sad to see him go. He may be a corporate guy, but he never struck me as a person without vision. He was no Don Mattrick in other words. When Don left Microsoft, I cheered.

I remember when Sony was the strongest brand on the shelf, at least here where I live in Texas. It's sad to see so many of their divisions shrink and crumble, but it's not a surprise. There came a point around the turn of the century when SONY stopped being a shorthand for quality (not talking Playstation, but other SONY brands and products). I worked for a nationwide chain of electronic retailers at that time, and it got to a point where SONY products were quickly becoming the most returned brand we sold while Toshiba and Samsung were growing into more reliable names.

wooty:
I wish the city of corruptions (London) execs would follow this model and trend. They seem to get increased bonuses when profits take a massive drop.

I'm not sure why they are struggling...I know they are involved in other areas of business and not just electronics. But there doesn't seem to be anything wrong with the electronics side of things in my eyes. I plug the products in, they work. What more could I ask for?

I don't get it either, I quite like their hardware. Looking at getting a vaio fit hybrid before they go.

VG_Addict:
I like how nobody says Sony is doomed when Kaz takes a 50% pay cut. On the other hand, Iwata does the same thing, and people are quick to call "Nintendoom".

thats because Nintendos Main money source is failing, while for Sony half the company is at a loss while other half os making money. Nintendo got its eggs all in one basket so to speak, and they all have broken, while for Sony only some of the baskpets have.

Kumagawa Misogi:

008Zulu:
The 4k t.v's will be good, in about 7 - 10 years. Right now, there is no reason (outside a few specialized fields) that would justify owning one. Blu-Ray only does 1080. Maybe if they released a player that did 4k upscaling (and did it well), then they might see better(?) sales in the home market.

http://store.sony.com/sony-dual-core-blu-ray-disc-player-4k-upscaling-zid27-BDPS6200/cat-27-catid-All-Blu-ray-DVD-Players;pgid=ddhO0Thw37NSRpr10sY3_4MB00005I1_VNVt;sid=2kka7e5wQCM_7b0BM5e66XZ6tQVfnIE8nzgctJci

There you go Sony Blu-ray that upscales to 4K.

What Sony really need to do is spin-off the TV side of the business.

useless. Upscaling is pointless because your stil lwatching it at 1080p, just with streched pixels. the only thing that does 4k natively now is PC.

 

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