Bandai Namco is changing the way it pays executives, which could put more pressure on them to make profit and appease shareholders.
With the new system, as shared by the company (via Automaton), executives’ pay will consist of a 30 percent fixed salary and 70 percent performance-based renumeration (previously this ratio was set at 40:60).
In addition, half of executive officers’ total earnings will be stock-based instead of cash-based (previously this was 40 percent). The goal is to encourage execs to act in the interest of company shareholders.
Further, the fixed salary for execs will be capped at around $4.14m (£3.1m) each year, a portion of which will be added to a shareholding plan to purchase company stock. Bonuses will be based on whether Bandai Namco meets targets on profits, earnings per share, and sustainability – if these aren’t met, execs may not receive a bonus.
The change suggests execs will need to appease shareholders and could be focused on making profit over creativity.
On the flipside, the company recently abolished employee bonuses in favour of raising average salaries, meaning entry-level positions now pay more (thanks Automaton).
The news follows Bandai Namco’s most recent earnings report from last week, where the company saw a 995 percent increase in profit from its game business (via GameBiz).
That’s thanks to strong sales last year of FromSoftware’s Elden Ring and its accompanying DLC Shadow of the Erdtree the company published, as well as Dragon Ball Sparking! Zero selling 5.4m copies.
Indeed, FromSoftware owner Kadokawa is expecting a 60 percent decline in profits this year due to Elden Ring’s success last year – and that’s despite its re-release on Switch 2, as well as this month’s online spin-off Elden Ring Nightreign.
Bandai Namco’s big fighting series Tekken is struggling, however, with a series of emergency patches being released for Tekken 8 to address balance changes. The next update will arrive tomorrow, 13th May.