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Sony Executives Lose Bonuses For Third Straight Year

Sony Executives Lose Bonuses For Third Straight Year

By Agence France-Presse | Updated: 13 May 2014 12:16 IST

Struggling electronics giant Sony will not pay bonuses to senior executives for the third straight year, the Japanese company said Tuesday, as it braces for another disastrous earnings showing.

The move means that President Kazuo Hirai will not have received any bonuses since he became chief executive officer in 2012, a Sony spokeswoman said.

Several top execs will follow suit, while dozens of other senior officials including those in charge of the troubled electronics divisions are expected to be left out of the bonuses round for the second straight year, she said.

"Our top management proposed to return their bonuses and that was accepted in the company's compensation committee as appropriate," the spokeswoman said.

Japanese reports said bonuses typically make up between 35 and 50 percent of an executive's remuneration, with the Nikkei business daily saying the total value of the bonuses that will not be paid could be as much as 1 billion yen ($10 million)

The comments came a day before the firm is due to announce its full-year earnings report.

Sony said earlier this month it would report a bigger-than-expected annual loss, blaming costs tied to its exit from the personal computer business, as the once-mighty company undergoes painful reforms.

Hirai has led a sweeping restructuring, including plans to cut 5,000 jobs and asset liquidisation that saw the $1.0 billion sale of Sony's Manhattan headquarters.

But he has repeatedly shrugged off pleas to abandon the ailing television unit, which he insists remains central to Sony's core business.

Losing its shine
Sony was once king of consumer electronics and a byword for cool.

But the company that revolutionised the way people listen to music with its Walkman portable cassette player has lost its footing since the sure-fire successes of the 1980s, and been overtaken by nimbler foreign competitors like Apple and Samsung.

The electronics that built the brand are now an albatross around its neck, weighing on the profits that other arms of the huge company generate, such as those in music publishing and movies.

Earlier this month, Sony said it expected to book a 130 billion yen net loss ($1.27 billion) in the fiscal year to March, while it slashed its operating earnings outlook.

The figure is worse than a 110 billion yen net loss forecast just three months ago, when it said it would cut 5,000 jobs in its struggling computer and television units.

The move came after Moody's downgraded its credit rating on Sony to junk, saying the maker of Bravia televisions and PlayStation game consoles had more work to do in repairing its battered balance sheet.

Sony's earnings, due on Wednesday, will offer a depressing comparison with sector stable mates Panasonic and Sharp, both of which have reported profits following on from huge losses the previous year.

Analysts have long urged Sony to follow Panasonic's lead and ditch televisions, which offer razor-thin margins and fierce competition.

But a Kyodo News report Tuesday that the company will suspend the development of organic LED televisions was knocked down by a Sony spokesman, who said: "We have produced business to business products and will keep development of organic LED televisions."

Earlier this year, Sony said it was selling its Vaio-brand PC division to a Japanese investment fund as it looks to concentrate on its lineup of smartphones and tablets.

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