Nintendo board takes pay cut following poor results

While Nintendo does have the best-selling console in the US with the 3DS, all's not well. The company today issued its financial results for the first nine months of this fiscal year, showing profits are down 30% from the same period last year. In an act of contrition, Nintendo president Satoru Iwata is halving his pay for the next five months.

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While Nintendo does have the best-selling console in the US with the 3DS, all's not well. The company today issued its financial results for the first nine months of this fiscal year, showing profits are down 30% from the same period last year. In an act of contrition, Nintendo president Satoru Iwata is halving his pay for the next five months.

Other board members will take paycuts of 20-30%, AFP reports. Asked whether the cuts might extend beyond June, Iwata responded, "I will make a decision after looking at the management situation at that time."

From April 2013 to the end of December, Nintendo made a profit of ¥101,95,000,00 (about $100 million), down 29.9% from this period in 2012. It explained in today's filing [PDF] that the Wii U hardware "still has a negative impact on Nintendo's profits owing mainly to its markdown in the United States and Europe, and sales of software, which has high profit margins, did not grow sufficiently."

Nintendo sold 15.96 million Wii U games in the nine-month period. Lifetime Wii U console sales by the end of the period were 5.86 million, so the attach rate is pretty low.

The company expects a less-than-great year for the Wii U. A few weeks ago, it drastic revised its console sales estimates for the year, cutting the Wii U's predicted sales from 9 million consoles to only 2.8 million.

Nintendo's considering a new business structure to help turn things around.

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  • reply
    January 29, 2014 8:30 AM

    Alice O'Connor posted a new article, Nintendo board takes pay cut following poor results.

    While Nintendo does have the best-selling console in the US with the 3DS, all's not well. The company today issued its financial results for the first nine months of this fiscal year, showing profits are down 30% from the same period last year. In an act of contrition, Nintendo president Satoru Iwata is halving his pay for the next five months.

    • reply
      January 29, 2014 8:38 AM

      Why don't American companies do stuff like this, hell, they still made a profit! I should invest in this company...

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        January 29, 2014 9:06 AM

        Some do, but usually only as a drastic measure. I believe it's cultural that more Japanese executives take personal pride in their business rather than American executives are usually only in it for the golden parachute.

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          January 29, 2014 10:08 AM

          That's it exactly.
          It's not "what can I do for my company" it's "how much can I get out of this company"

          CEOs are sociopaths, in a lot of cases.

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          January 29, 2014 12:42 PM

          Some American Fortune 500 CEOs have done the "$1 salary" thing as a symbolic measure, but that doesn't mean much financially for them, next to millions of dollars in stock options, for an executive who may have a net worth of hundreds of millions.

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            January 29, 2014 1:40 PM

            As well as a multi-million dollar golden parachute, for when they eventually fuck everything up.

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            January 29, 2014 2:47 PM

            a big part of the $1 salary is to avoid paying income tax

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              January 30, 2014 8:07 AM

              because dividends are taxed less than income, for some damn reason.

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        January 29, 2014 9:19 AM

        it's easier to lay people off and get a bonus for saving all that money

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          January 29, 2014 9:22 AM

          You're not wrong.

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          January 29, 2014 10:29 AM

          So true :(

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          January 29, 2014 10:59 AM

          And get rid of Splenda at the coffee bars. I had one CEO tell the company they did that to save one extra person's job. Then two weeks later they had another round of layoffs. So..umm... since we couldn't save that person (whoever it was) can we have our Splenda back? At least that way we can be a little more comfortable in this sinking ship? Nope. They pulled everything else eventually that they couldn't drop due to the contract. The company closed its doors several months later.

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        January 29, 2014 12:27 PM

        greed

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        January 29, 2014 12:53 PM

        [deleted]

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          January 29, 2014 12:57 PM

          He has a preference for cut alright.

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          January 29, 2014 1:14 PM

          Cook's total compensation package of US$378 million makes him the highest paid CEO in the world so a $4 million cut is nothing

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            January 29, 2014 1:27 PM

            That's not exactly right. Cook was going to get about $376 million just flatout in stock in 2011, but he argued that it he should have the stock spread out over a decade vesting as the years go by with the stipulation that he would not get anymore shares if Apple's performance was good, but loose shares if Apple's performance was poor.

            Apple's compensation committee wanted to limit the shares subject to these stipulations to only 50% because the changes Cook proposed were strictly downside risks and they wanted to give the shares just flatout in the first place, but Cook insisted that a large percentage be at risk because he felt CEOs should be more accountable in their leadership and he was in the position to possibly lead the way to this kind of structure.

            The $4 million decrease is a result of his choice to have his compensation package tied to Apple's performance.

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          January 29, 2014 9:45 PM

          Not voluntarily IIRC, the Board voted that on to him.

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        January 29, 2014 2:50 PM

        Tons do. Just not at the super-large companies.

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      January 29, 2014 12:26 PM

      Nintendo should use that extra money and put it into advertising.

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      January 29, 2014 9:31 PM

      Why doesn't any company in the west act like this.

      I really salute the Japanese people, they value their workforce a lot more than the profit margin.

      They have so much more honor than anyone in west.

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        January 29, 2014 9:32 PM

        Did Reggie do the same or is it only the people in the Kyoto HQ?

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      January 30, 2014 11:03 AM

      Cmon Alice. "Nintendo Board take paycut"
      "A few weeks ago, it drastic revised it's console sales estimate"

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