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Nintendo Chief Cuts His Compensation in Half

By - Source: Nintendo | B 27 comments

Nintendo last week surprised many by dropping the price of the 3DS from $250 to $170. It's a move that's expected to have quite an impact on Nintendo's profits. However, Nintendo management is ready to accept responsibility.

Following last week's earnings report and the news that the 3DS price was being dropped to $170, Nintendo president Satoru Iwata announced that management would be accepting a reduction in compensation.

Speaking during a financial results briefing, Iwata discussed the company's reasoning behind dropping the price of the 3DS. He also admitted that it's unusual for Nintendo to drop the price of a product less than six months after launch and accepted responsibility for "realizing both the short-term and the mid-to-long term profits."

"I feel greatly accountable for having to make the markdown shortly after the launch, for having damaged our consumers' trust, for having made a significant impact upon the financial forecasts, for the annual dividend now being expected to be significantly less than originally expected and for now forecasting that there will be no interim dividend," he said.

"(...) For the management to show its accountability for the level of the operating loss of this time and the prospect of no interim dividend, we decided at the directors' meeting yesterday that we would reduce the compensation we will receive as the directors of the company."

Iwata explained that the directors’ compensation of the company constitutes a fixed portion and a variable portion, which is decided by the actual results of the business performance.

"The decreased profit of the company is reflected as the decreased compensation in the variable portion or, more specifically, the bonus to be given at the end of this fiscal year," he said. "However, we understand that the management responsibility this time is heavier than usual, and we have decided to reduce the fixed compensation as well, by reducing it by 50 percent for the president, or me, a 30 percent reduction for the representative directors and a 20 percent reduction for the other directors."

Nintendo is expecting a strong software line for the 3DS towards the end of the year. This, combined with the price cut for the console and the always lucrative holiday season, should help boost sales. Are you tempted to purchase the 3DS now that it is significantly cheaper? Let us know in the comments below!

Read more about Nintendo's reasoning behind dropping the 3DS price here.

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Top Comments
  • 28 Hide
    redhotbd , August 2, 2011 3:39 PM
    Take any entry-level psychology class, and you'll find that Japan conducts business WAY more differently than the US. When US companies are about to go under, CEOs give themselves I nice, fat bonus check and leave all the employees below them adrift. In Japan, CEOs kind of treat their co-workers like an extension of their family and are willing to take hits in monetary income for the sake of keeping the company alive. This speaks for the loyalty and trust these companies have within their corporate structure... I admire that. Way to go, Satoru...
  • 28 Hide
    phishy714 , August 2, 2011 3:29 PM
    I think that is a good show of faith.

    If only American companies were this way. Instead, we give out bigger and bigger bonuses to our CEO's with bailout money for completely wrecking our economy in the first place.

    Either way, aside from the 3D features, I don't see any reason to spend any money on a 3DS when I already have a normal DS.
  • 20 Hide
    moonshire , August 2, 2011 3:43 PM
    FINALLY! Someone who takes responsibility. I greatly respect the decision that he has made. Not many other people would do that. Too many greedy people busy lining their pockets to bother. Now if only we could convince our government to do that......
Other Comments
    Display all 27 comments.
  • 20 Hide
    daniel123244 , August 2, 2011 3:26 PM
    At least he is taking responsibility.
  • 1 Hide
    Anonymous , August 2, 2011 3:27 PM
    I will certainly be buying the 3DS at this lower price point.
  • 13 Hide
    burnley14 , August 2, 2011 3:28 PM
    Well it's either a pay cut or Seppuku . . .
  • 28 Hide
    phishy714 , August 2, 2011 3:29 PM
    I think that is a good show of faith.

    If only American companies were this way. Instead, we give out bigger and bigger bonuses to our CEO's with bailout money for completely wrecking our economy in the first place.

    Either way, aside from the 3D features, I don't see any reason to spend any money on a 3DS when I already have a normal DS.
  • 28 Hide
    redhotbd , August 2, 2011 3:39 PM
    Take any entry-level psychology class, and you'll find that Japan conducts business WAY more differently than the US. When US companies are about to go under, CEOs give themselves I nice, fat bonus check and leave all the employees below them adrift. In Japan, CEOs kind of treat their co-workers like an extension of their family and are willing to take hits in monetary income for the sake of keeping the company alive. This speaks for the loyalty and trust these companies have within their corporate structure... I admire that. Way to go, Satoru...
  • 20 Hide
    moonshire , August 2, 2011 3:43 PM
    FINALLY! Someone who takes responsibility. I greatly respect the decision that he has made. Not many other people would do that. Too many greedy people busy lining their pockets to bother. Now if only we could convince our government to do that......
  • 15 Hide
    maestintaolius , August 2, 2011 3:53 PM
    moonshireFINALLY! Someone who takes responsibility. I greatly respect the decision that he has made. Not many other people would do that. Too many greedy people busy lining their pockets to bother. Now if only we could convince our government to do that......

    As opposed to Wall St. bankers, who fubared the economy and their companies and still demanded the bailouts and their bonuses.
  • 9 Hide
    Aoster87 , August 2, 2011 4:09 PM
    Phishy714If only American companies were this way. Instead, we give out bigger and bigger bonuses to our CEO's with bailout money for completely wrecking our economy in the first place.


    At least GM has repaid the government.
  • 1 Hide
    moonshire , August 2, 2011 4:12 PM
    Hmm true the wall st... was referring to singaporean government not US government. Where our minister are the highest paid in the world
  • 2 Hide
    fruitn , August 2, 2011 4:15 PM
    It's the same in (most of) EU as in the US. I do really hope that those greedy people will 1 day regret their decisions.

    Though I'm not going to buy the 3DS anyway, I prefer a phone thingy that can be used as an all-purpose device instead of having 2-4 different devices on the go.
  • 9 Hide
    bystander , August 2, 2011 4:20 PM
    I found this refreshing. When the big government bailout took place a few years back, those companies bailed out b the government gave themselves huge bonuses with some of the money.
  • 15 Hide
    slabbo , August 2, 2011 4:32 PM
    can't hate the guy for caring for his company enough to take a 50% pay cut and his other directors taking 20-30% across the board. that's just unheard of!
  • 8 Hide
    bustapr , August 2, 2011 5:11 PM
    respect for this dude. cares enough for his company and workers to take responsibility and cut his pay like that. I dont think Ive heard of something like this, the rich executives making big cuts but not 1 employee is cut. If only executives in other giant companies did such things.
  • 2 Hide
    wintermint , August 2, 2011 5:16 PM
    burnley14Well it's either a pay cut or Seppuku . . .


    Haha I would go for the pay cut :) 
  • 7 Hide
    gto127 , August 2, 2011 5:24 PM
    Nintendo is just a class company to have execs willing to do this..I'm sure glad they didn't sell out to Microsoft awhile back.
  • -5 Hide
    BlueFireAngel , August 2, 2011 5:45 PM
    Not all US CEO's take bailouts or pay increases as their company fails. Before you blanket the entire US commercial system with rhetoric, please consider what you are saying and it's implications.
  • -9 Hide
    Anonymous , August 2, 2011 5:54 PM
    That's some expensive publicity... I would have been more impressed if it was just done, and not announced.
  • 7 Hide
    a1b2c3 , August 2, 2011 6:20 PM
    ^^ How can you be impressed with something that you don't know happened?
  • 8 Hide
    scuba dave , August 2, 2011 6:21 PM
    Aoster87At least GM has repaid the government.


    No they haven't, actually. There is still alot of heat going around about GM and it's "repayment" claims.

    But this is a very clear example of just how much better managed a japanese company is compared to a similar american one. I can't recall the source(but I'm sure I can find it if desired) that a Japanese CEO makes 16x the salary of the "typical" worker. American CEO's frequently make over 300x the wages of a typical worker... Americans, in general, are just greedy, power hungry individuals, that want as much as possible, with zero to no effort involved. True, that is basically what everyone should want(the best compensation possible for their time, skills, and effort.. But seriously?), but with our "system" currently running the way it does, it allows for extravagantly outrageous abuse. Just another failure, on the belt, of the US. :/ 
  • 1 Hide
    cheesemon , August 2, 2011 6:48 PM
    Good example, Nintendo. Why can't more politicians be like this? After years of running my region poorly, the politicians in my area gave themselves a raise instead. :p 
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