TOKYO - Struggling electronics giant Sony (IW 1000/48) 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 company president Kazuo Hirai will not have received any bonuses since he became chief executive officer in 2012, a Sony spokeswoman said.
Several top executives 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 bonus 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% of an executive's remuneration, with the Nikkei business daily saying the total value of the bonuses that will not be paid this year could be up to one 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 liquidating 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 revolutionized 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 ($1.27 billion) net loss 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.
Credit Rating is Junk
The move came after Moody's downgraded its credit rating on Sony to junk, saying the maker of Bravia televisions and PlayStation game consoles must do more to repair its battered balance sheet.
Sony's earnings, due on Wednesday, will offer a depressing comparison with sector stablemates Panasonic and Sharp, both of which have reported profits following on from huge losses the previous year.
But a Tokyo-based analyst at a major brokerage firm said while the headlines might be bad, the company was making progress.
"What Sony has done in the past -- such as positioning itself for the high end of the TV business and restructuring its PC business -- is having an impact," said the analyst who was not authorized to speak to the press on the subject.
"If its smartphone and electronic device businesses don't encounter major problems, it's possible that the business could reach break-even."
But, the analyst cautioned, even its repositioned TV business was facing headwinds.
"Other Japanese electronics makers such as Sharp and Panasonic are looking at the same market, or the high-end niche market in the developed world."
A Kyodo News report Tuesday that the company will suspend the development of OLED (organic light-emitting diode) televisions was denied by a Sony spokesman.
Earlier this year Sony said it was selling its Vaio-brand PC division to a Japanese investment fund as it plans to concentrate on its lineup of smartphones and tablets.
Copyright Agence France-Presse, 2014