OSAKA – Panasonic Corp. will halve its president’s and incoming chairman’s remuneration from July compared with a year earlier to make clear their responsibility for the struggling firms’ deteriorating earnings, company officials said Wednesday.
The electronics maker has already implemented 10 to 20 percent cuts in directors’ salaries since February 2009 in the face of falling earnings. On top of that, its directors have voluntarily returned some of their salaries.
The latest move means the salaries of President Kazuhiro Tsuga and Executive Vice President Shusaku Nagae, who will assume the chairmanship in June, will be slashed by 60 percent, compared with their remuneration in February 2009. Other executives will be slapped with a 30 percent pay cut.
Panasonic is also in talks with its labor union to effectively cut employee salaries by several percentage points from this May to next March by extending their working hours.
The planned cut in executive pay aims not only at saving tens of billions in personnel costs in the current fiscal year, but also at winning approval for wage cuts from Panasonic’s regular employees.
Health care unit
Some U.S. investment funds are interested in acquiring shares of Panasonic Corp.’s health care unit, according to sources.
The ailing electronics maker aims to introduce external capital in Panasonic Healthcare Co. by the end of fiscal 2013 by selling part of its shareholdings in the subsidiary and through a third-party allotment, and Kohlberg Kravis Roberts, the Carlyle Group and Bain Capital have all indicated their interest, the sources said Tuesday.
Industry analysts say funds from outside the United States may also join the sweepstakes for resale purposes, as the health care business is expected to grow in the future. Panasonic will begin the process of selecting a buyer as early as this month, the sources said.
With a workforce of around 3,000, Panasonic Healthcare handles such products as blood glucose sensors and hearing aids. Its operating profit in the year to March 2012 totaled ¥8.8 billion.