SONY is in financial trouble: 40 senior executives give up performance bonuses

/sina finance and economics Japanese station chief Cai Chengping

as a management responsibility, SONY around 40 directors will full return the annual bonus, since this is SONY’s business for the first time. In addition to the SONY, sharp and panasonic are taking similar measures. But the symbolism than substance, may help to reassure investors and employees, but was unable to improve the company’s financial, more cannot fundamentally to erase. The yen to build the good external environment and internal system is the true test of how to reform and the key.

, President of SONY hirai submitted a proposal to the board of directors of the SONY companies around 40 executives all full return the bonuses.

“SONY President hirai request return company executives bonuses”, the news after “Japanese economic news” report, was quickly generate. According to the report, hirai has made a proposal to SONY board, request the company around 40 executives all full back bonuses, and have got the support of the board. The implementation of such large-scale return bonuses is SONY since its founding in 1946 for the first time.

apparently, hirai is to do so, mainly to management responsibility, as previously announced in March 2013) carry out the promise of electronics business profitability has not come. In is expected to be released on May 9th annual earnings, SONY’s electronics business will represent the deficit, especially the core business of the business will have 10 consecutive years of losses.

SONY to ask executives returned bonus is not the first time, but limited to the company’s President last year top seven directors such as hirai, this time in addition to top directors, also includes the executive director of the company, and electronics related branch director, the total number of about 40 people, return the bonuses accounted for about 30% of the directors’ salary – 30%, such a large return bonuses is SONY since its founding in 1946 for the first time. SONY executives enjoy high salary in Japanese society is an open secret, and has always been criticized by public opinion and speculation, this round of bonuses will return to cut costs and SONY nearly 1 billion yen.

according to the measure, the Japanese public opinion evaluation. Have opinions praised SONY executives have remarkable bear spirit, in the words of the Chinese habit is “virtuous”, but a lot of people say, “even if you don’t get bonuses, their salary is high enough. Unable to take the company out of the woods, bonuses, even, hang it all?” Asahi news agency’s AERA magazine editor, to think, “they have made, so weak, take responsibility for granted”.

in fact, in the case of Japanese electronics general downturn, senior return the bonuses are not uncommon in the industry. In addition to SONY, is going to the sharp refinancing loans from the bank also decided to start from last year’s request the company all the directors full refund or give up bonus, panasonic decision since July this year will also chairman and President of salary in half, the rest of the director pay cut by 20%.

however, it must be pointed out that the company management pay cuts or waived, tend to be more symbolic than substantive. Defeathering management from himself, taking on their own, no doubt to reassure investors and employees well, good for the enhancement enterprise centripetal force greatly. But in terms of the amount of it to improve the company’s financial situation is just a drop in the bucket, limited to negligible.

and, more importantly, return bonuses, didn’t the Japanese electronics industry fundamentally solve the problem. Since Mr Abe came to power, its strong New Deal to let the yen fell sharply, which has created a good external environment for the electronics industry, with opinion polls show that up to 90% of the electronics company admitted that “condition is improving. Under such a better “external”, SONY is expected to profit for the first time to celebrate the 5 years, SONY estimated last week for the fiscal year ending March 31 had net profit of 40 billion yen, is twice as many had expected.

but this hard-won “black” is derived from SONY’s financial business and insurance business, the business is profitable is not realized how to reform itself, but only benefit from a weaker yen. In fact, today’s SONY also can be referred to as “electronic business” is still questionable, because today’s more than half of SONY’s profits from the financial sector, rather than its expertise in electronic communication.

the author in the process of Japanese companies contact, strongly feel that Japanese downturn almost without exception, there is a problem, which let them incomparably glorious model of development has now become no longer work, but even so, these companies are still without getting rid of system inertia, in terms of the fundamental reform of the system to adjust, obviously is slow.

Japanese products have long been to the quality and performance of winning, they form the experience is “goods not sold”. But inadvertently, market participants and rules are quietly changing, the global market is from developed countries to emerging countries, after the lehman crisis, more in accelerating the transformation of the global market. Cling to the past successful experience of Japanese companies, are gradually being keep up with the trend of the new era of emerging market countries enterprise chased hard drive. Take the traditional TV sector, Japanese electronics giants such as SONY, though still stick to the business, but obviously advantage already sell at a discount greatly.

, as it were, under the situation of the yen, Japan’s electronics industry can temporize, break the already serious drag on the system bottleneck in its development, is the real test of the face, this also is the key to its final can save themselves, but the reform strength of Japanese companies in these areas is obviously still very not enough.