5/2/2013 7:16 PM ET|
40 Sony execs take a pay cut
The troubled electronics titan's CEO and other honchos declined bonuses worth 30% to 50% of their pay as their products lose ground.
Sony (SNE) CEO Kazuo Hirai (pictured) and about 40 other executives at the electronics giant are taking a voluntary pay cut after a 2012 fiscal year that could be kindly described as godawful.
Bloomberg notes that all of the Sony bigwigs involved are forgoing bonuses worth 30% to 50% of their annual salaries after the company took a $115 million quarterly loss in February. The company had to sell some of its properties (including its U.S. headquarters in New York), stocks and other holdings, fire more than 10,000 workers and get some help from a weakening yen to post a $410 million gain for 2012. It had posted a $6.4 billion net loss the year before and has continued to trail behind competitors like Apple (AAPL) and Samsung.
Hirai already took at 24% pay cut last summer that reduced his earnings to $1.45 million. By comparison, Apple CEO Tim Cook's compensation package earned him $4.2 million during that same stretch.
Bloomberg reported Monday that the ratio of CEO-to-worker pay has increased 1,000% since 1950. Today's Fortune 500 CEOs make 204 times more than regular workers on average, up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950. However, that pay is increasingly absorbing the hit when chief executives fail to live up to their lofty compensation.
Recently departed J.C. Penney (JCP) CEO Ron Johnson was given a package worth 1,795 times the average wages and benefits of a U.S. department store worker when he was hired in 2011. Just before he left, however, J.C. Penney hacked Johnson's pay by roughly 97% after a series of changes, layoffs and missteps left 43,000 workers jobless and cut the company's share price nearly in half.
Barclays (BCS) CEO Anthony Jenkins, meanwhile, gave up a $4.35 million bonus in February amid scandals over rate-fixing, product mis-selling and big bonuses. While Sony still hopes products like its Xperia smartphones and PlayStation 4 game console can revive its suffering electronics branch, a continued slump could prove even more costly for its underperforming executive team.
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Strong sales in November kept a strong year on course, and solid profit margins helped as well.
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