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June 28, 2011 6:12 pm
Sir Howard Stringer, chief executive of Sony, took a 16 per cent pay cut last year as the electronics group suffered its third straight net loss, though he remained one of the best compensated executives in Japan.
Sony disclosed Sir Howard’s pay at its annual shareholders’ meeting on Tuesday.
Public debate in Japan over executive pay – particularly that of foreigners, who tend to be paid more than Japanese chief executives – has increased since last year, when new rules forced companies to disclose the compensation of individual executives for the first time.
Sir Howard, born in the UK, and Brazilian-born Carlos Ghosn of Nissan are the highest paid bosses of listed Japanese groups, receiving about $10m apiece including stock options. Chief executives in the US and Europe can command higher packages, but these are still much more favourable than those awarded to Japanese executives.
Takanobu Ito, president of Honda, for instance, does not make enough to meet the individual disclosure threshold of Y100m ($1.24m).
Sir Howard’s pay cut covers his cash salary and bonuses for the financial year to March 31, which fell from Y408m ($5m) to Y345m. His total reported compensation, including the theoretical value of stock options, rose slightly to Y863m, though Sony’s share price has fallen since the calculation date in November. The number of options issued remained the same at 500,000.
The decline in Sony’s market value – about 30 per cent so far this year, versus a 6 per cent decline in Japan’s Nikkei average – was one of several issues that drew shareholder complaints at this year’s meeting. At least one shareholder demanded that Sir Howard step down.
Sir Howard apologised for the breach of Sony’s computer security in April that allowed hackers to steal personal information on some 100m users of its PlayStation Network gaming platform and other online services.
In a partial defence of the company, however, he said Sony had been targeted for its vigorous enforcement of its intellectual property rights. Attacks on Sony’s systems began around the same time it sued a well-known young hacker, George Hotz, for publishing instructions on how to “unlock” the PlayStation3 game console to enable installation of unauthorised software. Mr Hotz has recently joined Facebook’s technical team.
Several other companies and government agencies have suffered hacking attacks since Sony’s attack.
“If hackers can hack Citibank, the FBI and the CIA, and yesterday the video game company Electronic Arts, then it’s a negative situation that governments may have to resolve,” Sir Howard said. At 69, he has indicated he plans to retire soon, though the timing has not been announced.
Kazuo Hirai, his 50-year-old deputy who rose through the PlayStation division, is the leading candidate to succeed him.
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