Scandal-hit Toshiba to slash pay of interim chief, 8 execs

Mr Masashi Muromachi arriving for a meeting with a revitalisation committee at Toshiba's Tokyo headquarters yesterday.
Mr Masashi Muromachi arriving for a meeting with a revitalisation committee at Toshiba's Tokyo headquarters yesterday.PHOTO: BLOOMBERG

TOKYO • Toshiba Corp, emerging from an accounting scandal that may cost at least US$1.2 billion (S$1.7 billion) in writedowns, said it would slash its interim chief executive's monthly salary for two months by 90 per cent, including previously announced cuts.

The pay of eight senior executives would also be docked, and an extraordinary shareholders' meeting in September would consider any additional measures.

The conglomerate has also appointed a six-member revitalisation committee charged with preventing improprieties in the future.

Mr Hiroyuki Itami, who is currently an outside board member at the firm, will lead the group, Toshiba said in a statement yesterday. He will be joined by outside directors Ken Shimauchi, Kiyomi Saito and Sakutaro Tanino.

Toshiba has lost about US$4 billion in market capitalisation since May 8, when it withdrew forecasts and cancelled its year-end dividend before later widening an accounting probe into construction projects to cover the entire firm.

President Hisao Tanaka, vice-chairman Norio Sasaki and adviser Atsutoshi Nishida stepped down this month to take responsibility for Japan's biggest accounting scandal since 2011.

Mr Sasaki and Mr Nishida are former presidents.

No charges have been filed against Toshiba or its executives.

Mitsubishi Chemical Holdings chairman Yoshimitsu Kobayashi and former Supreme Court justice Yuki Furuta will act as observers, according to the statement.

Eight senior executives will have their pay lowered by 40 per cent for three months from July, while interim president and CEO Masashi Muromachi will take a 90 per cent pay cut from August.

The firm earlier proposed Mr Muromachi as a "more permanent chief executive" beyond September after a slew of executives quit over their roles in the accounting scandal, Japanese media reported.

Toshiba is expected to propose the plan at an extraordinary shareholders' meeting, media reports said, without citing sources.

Mr Muromachi is considered a safe pair of hands to lead Toshiba through its current turmoil and was not implicated in the accounting irregularities that saw the departure of eight officials last week.

Toshiba is also considering selling shares and properties to rebuild a balance sheet and reputation rocked by the accounting probe that revealed it inflated earnings by at least 156 billion yen (S$1.7 billion) since the 2008 financial year.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 30, 2015, with the headline 'Scandal-hit Toshiba to slash pay of interim chief, 8 execs'. Print Edition | Subscribe