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> But what would that even look like? > Iwata ran the Kyoto, Japan-based video game company [Nintendo] from 2002 until his death in 2015. To avoid layoffs, Iwa

• pizzathyme 2y ago
  This is probably the best answer in terms of what people want to see, that would also still give the company the best leadership going forward.
  • dragonwriter 2y ago
    If the CEO taking a paycut materially reduces the size of what would otherwise be a large layoff on the basis if reduced cost savings, the CEO was way overpaid to start with. (And it probably doesn't change the number of people the firm can usefully employ under changed conditions, even if it provides cost savings, because the latter is based on whether employing them makes more money than it costs, to which external cost savings are probably mostly irrelevant.)
• voisin 2y ago
  By taking that pay cut, how many employees could Nintendo keep that would otherwise have been fired? 5? 20? Certainly not in the hundreds or thousands. This just seems like virtue signalling. Edit: to expand on my point re virtue signalling: the article states the CEO took a salary cut, not total compensation (and it doesn’t elaborate on the value of the cut). Salary is a small fraction of CEO total compensation - the bulk of which is stock based, and even in the event that stock grants were also cut, the CEO surely already had significant stock. Cutting a relatively small component of compensation in order to boost the stock price which disproportionately adds to the CEO’s personal wealth seems like virtue signalling to me. If the CEO said “shareholders be damned, morale and culture are all that matters in the long run, no layoffs etc etc” that would seem more meaningful.
  • jryan49 2y ago
    I feel like this would be the few times where virtue signaling is probably a benefit. It can make all the people in the company feel like the leader is on their side, and maybe make the employees less resentful and be more productive.
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  • schnebbau 2y ago
    It shows the rest of the staff that you actually are taking responsibility.
  • superxpro12 2y ago
    Optics matter. When a CEO approves mass layoffs, and ALSO approves a 60% salary increase, I can only conclude that the CEO is nothing but self-interested. Rewarding yourself for firing a statistically significant percentage of your company SHOULD indicate failure, not success.
  • steve_adams_86 2y ago
    It may signal virtue, but it has direct, practical, beneficial impacts on the company. I don’t see why that would be virtue signaling. What would someone need to do in order to avoid being reduced to a virtue signaller?
  • veggieroll 2y ago
    5 or 20 workers (and their families) who don't get jerked around for stuff way outside their control is an absolute win. Right now, there is no actual downside for executives. Just less upside. Did they earn XX Million this year or XXX Million. Some tangible downside would be nice. I mean, heck, why aren't they fired? And really, it's more then middle management where that'd make a huge difference. If bad performance led to actual shakeups in the entrenched middle management, we might actually see business practices change rather than continue on through the established fiefdoms and petty corporate politics.
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• tjpnz 2y ago
  It should be added that layoffs are not commonplace in Japan. What you'll see instead are bonus cuts and salary reductions (at most 20 percent). To do US style layoffs you would need to show that the affected department was directly involved in a line of business the company has abandoned. If this isn't the case the employees stand a good chance of successfully suing the company in court. And then there's the reputational damage which would be considerable in a country where lifetime employment is valued. In other words this kind of behavior wouldn't be viewed as all that surprising locally.