Business / Corporate

Money-losing Mitsubishi Motors says top execs to take pay cuts

AP

Mitsubishi Motors told its shareholders Thursday that its top executives are taking pay cuts to share responsibility for the automaker’s financial losses.

“I hope we can gain your understanding,” Chief Executive Takao Kato said on how, given the harsh conditions, there will be no dividends.

Like other automakers, Mitsubishi Motors Corp. has seen its sales plunge amid the coronavirus pandemic. It reported a ¥25.8 billion ($241 million) loss for the fiscal year ended in March.

The Tokyo-based maker of the Outlander SUV and i-MiEV electric car has not given a projection for the current fiscal year because of uncertainties about the outbreak.

Kato, wearing a mask like other participants, acknowledged the situation remained difficult.

The meeting, which lasted about a half hour, was streamed online. Stock owners were asked not to come to the meeting because of the outbreak. Only 30 seats were provided, placed apart for social distancing.

Kato said the executives’ pay cuts amount to about 45 percent of their overall pay by lowering salaries and foregoing performance-linked bonus pay.

Mitsubishi Motors is part of an alliance involving bigger automaker Nissan Motor Co. and Renault of France. The alliance has been embattled by the scandal of its former chief, Carlos Ghosn, who was arrested in 2018 on financial misconduct allegations. Ghosn has steadfastly maintained his innocence.

While out on bail, Ghosn fled to Lebanon. Although the trial is in limbo, the scandal has tarnished the companies’ brand image and raised questions about the future of the three-way alliance.

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