Nikesh Arora’s two-year tenure cost SoftBank $300 million
Nikesh Arora left SoftBank after CEO Masayoshi Son, who had called him a likely successor earlier this year, decided to remain at the helm of the company he founded.business Updated: Jul 29, 2016 23:50 IST
Nikesh Arora’s two-year term as SoftBank’s president cost the Japanese tech giant $300 million (just over ₹2,000 crore), according to a Bloomberg report.
SoftBank booked $66 million (6,828 million yen or ₹440 crore) in expenses arising from Arora’s resignation last month, the company said in its results statement for the quarter ending June 30, 2016, on Thursday. The figure was categorised as operating loss for the April-June period.
That’s on top of the $236 million (around ₹1,600 crore) that Arora received in compensation over the previous two fiscal years.
Apart from these costs, the company also bought back $102 million of its own shares from Arora, who was granted the shares in December 2014.
According to the Bloomberg report, the headline figure (of $300 million), which is unprecedented in Japan, it’s also large compared to US executive compensation packages. “Marissa Mayer, the chief executive of Yahoo! Inc, was paid $109.6 million (₹734 crore) over the past three years. Arora’s compensation rivals those of Apple’s Tim Cook and Walt Disney’s Bob Iger,” the report said.
Arora left SoftBank after CEO Masayoshi Son, who had called him a likely successor earlier this year, decided to remain at the helm of the company he founded.
At a news conference following SoftBank’s quarterly earnings report, Son defended Arora’s compensation, citing new investments led by his former deputy in India and China, and arranging the sale of SoftBank’s stakes in Supercell Oy and Alibaba Group. The sale reportedly made room for SoftBank’s $32-billion acquisition of ARM.
Indian e-commerce companies, in which SoftBank has invested money include Snapdeal, Ola Cabs, Housing.com and Oyo Rooms.
SoftBank’s quarterly profit surged 19% to $2.4 billion during April-June, as its 4% stake sale in Alibaba offset losses at its US mobile unit Sprint.