In a move common in the U.S., but unusual in Japan, the Japan Times reported today that Panasonic Corp. paid ¥1.855 ($18.7 million) to four directors to leave the company in Fiscal 2012. The company broke the news of what is known in the U.S. as a golden parachute in materials circulated along with invitations sent to the shareholders meeting coming up later in the month.
See more on this generous payout from a struggling company…
The announcement of the payouts identified them as “retirement allowances.” Interestingly, Panasonic phased out retirement allowances in 2006, but the materials indicated that the four board members had their programs grandfathered in as they were on the board prior to the decision to phase out retirement allowances.
While The Japan Times did not name all four of the directors who retired, it did single out one – Masaharu Matsushita who has been on the board for 65-years. According to the report, the total amount was broken down or paid out on a pro-rated basis, based on years of service. Given Matsushita’s 65-years on the board (not to mention his famous last name of the Panasonic founding family) – means he likely got the bulk of the total payout. (The company did not provide a breakdown of the specific amounts paid to each director.)
A total of 23 other board members received compensation of ¥860 million for serving on the board. As the report noted, this works out to approximately ¥37.48 million (about $378,000) for each board member. While the inference was that this seemed like a lot to pay directors for a company that is losing a lot of money – the report noted that this level of compensation was down 22% from the previous year.
And just how much money did Panasonic lose in its last fiscal year (fiscal 2013)? The total group net loss was ¥754.25 billion ($7.6 billion). This loss, while massive, hurts even worse when you consider that the company lost ¥772.2 billion in the immediately preceding year (fiscal 2012).
All of this suggests that it might be an interesting shareholders meeting which is scheduled for June 26.