Japanese Gaming Company Changing Executive Salaries To How It Should Be

by

Summary

  • Bandai Namco shifts to performance-based executive pay, reducing fixed salary to 30%. (98 characters)
  • Executives’ earnings now 70% performance-based, 50% stock-based, aiming to align interests. (97 characters)
  • Other companies should follow Bandai Namco’s lead, but unlikely in US gaming industry. (86 characters)

Despite numerous game development studios shedding positions this year, it’s often the executives in the gaming industry who emerge unscathed following such studio downsizing events. What’s more troubling is that these same gaming executives typically enjoy inflated salaries, which might leave you astonished upon learning their earning figures.

One Japanese gaming corporation is considering a shift in the remuneration structure for its executive team, and honestly, I wish such a change would spread globally, even though I’m skeptical it will ever occur.

Bandai Namco Changes Executive Salaries To Match Their Performance

On May 8, Bandai Namco Holdings declared that they will adjust executive salaries based on their individual performances.

The structure of an executive’s compensation has changed; now, roughly 30% will consist of a fixed salary, while the rest, approximately 70%, will be performance-related pay. Earlier, this ratio was 40:60, meaning there was a 10% reduction in base salary to make it more performance-driven. Furthermore, half of an executive officer’s total earnings will now come in the form of stock instead of cash. This shift aims to encourage these executives to focus on the wellbeing of the company’s shareholders.

Bandai Namco has set a limit for the annual total compensation of its executives at $4.14 million, with some of that amount being allocated towards a stock purchasing plan. Regarding bonuses, these will be contingent on the company’s success in achieving its financial targets, specifically profits. If the objectives aren’t reached, executives may not receive any bonus payments. The maximum amount that can be distributed as bonuses is either $4.14 million or 1.5% of the net income for shareholders for that year, whichever is less.

This action appears to be beneficial, and it’s something other firms might want to emulate, although it’s unlikely that US gaming companies will adopt it. At present, game creators may have to endure this situation, and for the time being, we should pretend these gaming executives aren’t excessively overcompensated.

Might other game developers choose a similar path, potentially leading to a slowdown in studio closures due to more sustainable business models being adopted?

Regarding Bandai Namco updates, they unveiled the upcoming DLC combatant for Tekken 8, but the response from the gaming community hasn’t been quite what they expected due to the return of a character that doesn’t seem to be well-received by fans.

Read More

2025-05-12 23:55