Bandai Namco is overhauling its executive pay structure, a move that could amplify efforts toward profitability and enhancing shareholder satisfaction.
As detailed by the company in their official report, this new compensation framework (as reported by Automaton) will see 30% of an executive’s salary fixed, while an impressive 70% will hinge on their performance metrics, a notable change from the earlier 40% fixed to 60% performance-based structure.
Additionally, half of the pay package for executives will now be linked to stock options, transitioning from the previous model where 40% of their earnings were cash-based. This strategy is designed to align executive priorities with those of shareholders.
The fixed annual compensation for executives will be capped at around $4.14 million (£3.1 million), a portion of which will contribute to a share ownership plan for acquiring company stock. Bonuses for these leaders are contingent upon Bandai Namco achieving specific goals related to profitability, earnings per share, and sustainability; if these targets aren’t met, no bonuses will be awarded.
This change may indicate a shift in priorities for executives, who could now place a heavier emphasis on delivering returns to shareholders rather than focusing on innovative projects.
On a different note, Bandai Namco is also aiming to elevate pay for entry-level employees by replacing bonuses with increased average salaries and offering higher starting wages, as highlighted by Automaton.
This strategic shift follows Bandai Namco’s recent earnings report, which revealed a staggering 995% increase in profits from its gaming division (source: GameBiz).
This remarkable growth has been driven by the success of FromSoftware’s Elden Ring and its downloadable content, Shadow of the Erdtree, alongside the impressive sales of 5.4 million copies of Dragon Ball Sparking! Zero.
Nevertheless, it’s important to recognize that Kadokawa, which owns FromSoftware, is forecasting a significant 60% drop in profits this fiscal year, due to the extraordinary performance of Elden Ring last year, despite plans for its re-release on the Switch 2 and an upcoming online spin-off titled Elden Ring Nightreign.
At the same time, Bandai Namco’s main fighting franchise, Tekken, is encountering its own set of challenges, currently addressing balance issues in Tekken 8 through a series of emergency patches. The next update is scheduled for release tomorrow, May 13th.
