Mitsubishi Motors bosses taking pay cut to save company

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04-29-2020, 08:03 PM
Top_Fuel

Mitsubishi Motors bosses taking pay cut to save company

Mitsubishi Motors bosses are taking pay cut to save company

Remember when Nissan's bosses got blasted at their last stockholder meeting for the bad financial results and for a director riding a Toyota Alphard?

Well, it seems Alliance member Mitsubishi Motors Corporation has taken the lessons to heart.

In a press release, Mitsubishi Motors Corporation (MMC) made some revisions to their financial forecast for the 2019 Fiscal Year, and the forecast isn't good. Initially, the company predicted a lower performance in FY2019-2020 compared to FY2018-2019 due to the global dip in demand before COVID-19 but dropped sharply even further due to COVID-19.

The new MMC forecast for FY2019-2020 represents a larger drop with net sales down by 9.7%, operating profit forecasted to drop by 89.2%, ordinary profit dropping to negative figures, and basic earnings per share dropping to -17.36 JPY. In FY2018-2019, each share earned investors 89.26 yen.

Those following the auto industry know that Japanese automakers tend to follow the Fiscal Year system wherein companies count their performance from April 1 to March 31 (i.e. FY2019-2020 is from April 1, 2019, to March 31, 2020) rather than a calendar year.

That means by now, MMC should have been able to release the final figures for FY2019-2020, but because COVID-19 has shut down offices for several key markets -the Philippines (with Mitsubishi Motors Philippines) being one of those key markets- MMC has not been able to get the full and final figures due to the unavailability of final audits.

In that regard, and in anticipation of the low numbers, MMC has decided to not pay a year-end dividend to stockholders. Mitsubishi Motors said in a statement that they need to urgently stabilize their financial base to restore profitability.

In light of that issue (and the undoubtedly huge backlash it would incur from shareholders), Mitsubishi Motors executives have decided to take a big pay cut.

Top MMC bosses (Representative Executive Officers, Executive Officers, Corporate Officers) will not be receiving any performance-based compensation (AKA: bonus), and they will all take a 20-30% reduction in base compensation. Non-Executive Directors including Outside Directors will take a pay cut of 10-25%.

The pay cut will be effective for the next Fiscal Year.

If you recall MMC's biggest stakeholder is Nissan, and during the last shareholders meeting, Nissan's bosses were grilled for being unable to pay dividends and were blasted for not taking a reduction in pay.

Source:

https://www.autoindustriya.com/auto-...e-company.html
04-29-2020, 08:56 PM
Mark

Quote:

Originally Posted by Top_Fuel

Mitsubishi Motors bosses are taking pay cut to save company

Remember when Nissan's bosses got blasted at their last stockholder meeting for the bad financial results and for a director riding a Toyota Alphard?

Well, it seems Alliance member Mitsubishi Motors Corporation has taken the lessons to heart.

In a press release, Mitsubishi Motors Corporation (MMC) made some revisions to their financial forecast for the 2019 Fiscal Year, and the forecast isn't good. Initially, the company predicted a lower performance in FY2019-2020 compared to FY2018-2019 due to the global dip in demand before COVID-19 but dropped sharply even further due to COVID-19.

The new MMC forecast for FY2019-2020 represents a larger drop with net sales down by 9.7%, operating profit forecasted to drop by 89.2%, ordinary profit dropping to negative figures, and basic earnings per share dropping to -17.36 JPY. In FY2018-2019, each share earned investors 89.26 yen.

Those following the auto industry know that Japanese automakers tend to follow the Fiscal Year system wherein companies count their performance from April 1 to March 31 (i.e. FY2019-2020 is from April 1, 2019, to March 31, 2020) rather than a calendar year.

That means by now, MMC should have been able to release the final figures for FY2019-2020, but because COVID-19 has shut down offices for several key markets -the Philippines (with Mitsubishi Motors Philippines) being one of those key markets- MMC has not been able to get the full and final figures due to the unavailability of final audits.

In that regard, and in anticipation of the low numbers, MMC has decided to not pay a year-end dividend to stockholders. Mitsubishi Motors said in a statement that they need to urgently stabilize their financial base to restore profitability.

In light of that issue (and the undoubtedly huge backlash it would incur from shareholders), Mitsubishi Motors executives have decided to take a big pay cut.

Top MMC bosses (Representative Executive Officers, Executive Officers, Corporate Officers) will not be receiving any performance-based compensation (AKA: bonus), and they will all take a 20-30% reduction in base compensation. Non-Executive Directors including Outside Directors will take a pay cut of 10-25%.

The pay cut will be effective for the next Fiscal Year.

If you recall MMC's biggest stakeholder is Nissan, and during the last shareholders meeting, Nissan's bosses were grilled for being unable to pay dividends and were blasted for not taking a reduction in pay.

Source:

https://www.autoindustriya.com/auto-...e-company.html

I didn't read the article, but doesn't saving the company also save their high paying jobs?

I don't feel the Renault/Nissan merger has gone very well. I'm a bit disappointed that Mitsubishi became associated with them. I sort of feel the same way about Fiat/Chrysler/Jeep/Ram.
04-30-2020, 02:26 AM
Dirk Diggler

Hopefully the heads at Mitsubishi Corp will see the light and pull their automotive branch out of Nissan's clutches and get their motor division's credibility back. The Mitsubishi keiretsu group must surely see what a failure this alliance is. They have the capital to regain control. They control banking, shipping, construction, electronics, etc. it's time they got their motor division back and force the current Mitsubishi Motors top brass to commit seppuku like they would of during WWII. Mitsu's star was on the rise here in Murica, but after COVID 19? Mitsubishi will go the way of Suzuki here IMO.
04-30-2020, 02:43 AM
Dirk Diggler

1 Attachment(s)

Attachment 17882
04-30-2020, 02:48 PM
dspace9

Quote:

Originally Posted by Top_Fuel

If you recall MMC's biggest stakeholder is Nissan, and during the last shareholders meeting, Nissan's bosses were grilled for being unable to pay dividends and were blasted for not taking a reduction in pay.

Source:

https://www.autoindustriya.com/auto-...e-company.html

Thanks Top Gear for the post.

So things weren't looking good for Mitsu BEFORE coronavirus... so I wonder if 2020 is the year the Mitsubishi ship sinks.

Get your warranty work done people!
04-30-2020, 06:17 PM
Fummins

Thanks Top Gear and thanks Spishak.
05-01-2020, 12:13 PM
dspace9

I should clarify that I hope Mitsubishi lasts the recession..it is not looking good for the auto manufacturers, Tesla even.

Considering the scandals with Mitsubishi exec(s?) of the white-collar crime variety, then emissions scandals, you wonder how Mitsu keeps on going. Now this downturn in demand.

Mitsubishi makes electrical and heating equipment etc. big time...so I think it's Mitsubishi Motors specifically that's in trouble sorry.
05-01-2020, 06:45 PM
Subcompact Culture

I, too, am wondering how MMNA will do doing the recession. They'd definitely been making steps toward growth, which is great. As is typical with these kinds of downturns, the little guys generally feel it most. I have my fingers and toes crossed for MMNA in this time and hope they can weather this storm.
05-01-2020, 11:39 PM
dspace9

Like Dirk said, look at what happened to Suzuki America only a few years after the Great Recession of 2008. Slow sales, and then Suzuki left the US market completely.

Probably because nobody bought their Suzuki Kizashi sedans, even though they were high quality cars from the looks of it. Anyway, hard to say what will happen to MMNA. But it seems like one thing after another battering the company.

Last big recession took out Olds, took out Pontiac, Saab.. I know they are all related to GM restructuring but still.
05-02-2020, 01:20 AM
Dirk Diggler

In America Mitsubishi is the little guy. Go to Japan, SE Asia, Australia, South America, they're all over the place. I think the Mitsubishi Keiretsu is the 6th largest conglomerate in Japan. Mitsu might pull out for a few years, but if Alfa Romeo and Fiat can make a comeback here so can Mitsu I suppose?