Sony has announced that 40 of its senior executives are forgoing bonuses worth 30-50% of their overall salary after the company failed to make the electronics business profitable.
CEO Kaz Hirai, who is among the 40 giving up their bonus, came up with the idea because of the “severe business circumstances, including stagnant performance in the electronics sector”.
The company has not announced how much the move will save, but Japanese media outlets have said that it could total 1bn yen ($10m). While $10m isn’t that much for a multi-billion dollar company, it’s a symbolic gesture by the executives to admit failure, as well as giving them an incentive to make the electronics business profitable next year.
Due to the weakening yen, asset sales and better than expected performance in the financial sector, Sony actually announced that their annual profit forecasts for last year were doubled. Unfortunately for Sony, one-off billion dollar asset sales are not a sustainable business method for any company, and neither is relying on changing currency rates. To try to bring about profitability in all sectors, Hirai has implemented the ‘One Sony’ plan, which aims to get all of Sony’s many branches working closer together. Analysts are split on how successful the plan will turn out to be, but thankfully it hasn’t involved Sony moving away from gaming or PlayStation.
Full year results for the last fiscal year will be revealed next week.