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Nintendo CEO Took 50 Percent Pay Cut After Losses

Nintendo avoided having to lay off a single person as a result of the decision.

In 2014, to make amends for the company’s losses, Nintendo CEO Satoru Iwata took a 50% pay cut for five months, while other senior employees, including Mario inventor Shigeru Miyamoto, forewent 20 to 30% of their compensation.

Sales declined 8.1 percent to $4.86 billion in the nine months ending in December 2013, compared to the same time the previous year. Wii U sales continued to disappoint, resulting in a $15.3 million operational loss for Nintendo.

Nintendo’s sales have been impacted by the rise of smartphones and tablets, as well as the success of the PlayStation 4 and Xbox One consoles.

Nintendo forecasted a $335 million deficit for the fiscal year ending in March the earlier month for that year.

When companies underperform or are embroiled in scandals, CEOs in Japan are accustomed to taking pay cuts and forfeiting bonuses. In 2012, after Nintendo announced its first annual loss since going public, Iwata gave up more than two-thirds of his compensation.

That was the company’s third straight year of losses after dominating the casual gaming industry with the first Wii device. Despite missing sales projections, the portable 3DS sold over 150 million units, putting it on par with the PlayStation 2, the best-selling gaming console of all time.

Nintendo had more than $8 billion in cash reserves at the time, and a track record of successfully reinventing itself.

Nintendo avoided having to lay off a single person as a result of the decision, which many in the industry hailed as unique.

Sources:

https://www.bbc.com/news/business-25941070

https://www.businessinsider.in/tech/nintendos-ceo-will-halve-his-pay-after-profits-drop/articleshow/29560518.cms