Head of ailing chip maker, Elpida, to work for no salary

Written by Writer on Monday, October 20th, 2008

Head of ailing chip maker, Elpida, to work for no salary

AFP, TOKYO
Tuesday, Oct 21, 2008

The head of Japanese computer chip maker Elpida Memory Inc will work for free in a symbolic gesture to help turn around the group’s poor performance, the company said yesterday.

While Japanese executives often cut their own pay as punishment for a company’s bad performance or wrongdoing, it is highly unusual for a corporate chief to work completely for free.

Elpida president Yukio Sakamoto will accept no salary next month and in December and still slash his salary by at least half until the company starts making a profit, the firm said.

Elpida, a leading producer of dynamic random access memory (DRAM) chips used in cellphones and home electronics, said the decision was symbolic and would not substantially impact the company’s financial condition.

“He wanted to show his strong determination to shareholders to turn around the company’s performance,” Elpida spokeswoman Kumi Higuchi said.

She declined to specify Sakamoto’s salary but said it was already below the average for the president of a listed Japanese company, which she put at ￥50 million (US$490,000) a year.

Japan has traditionally prided itself on the small disparity in salary between executives and rank-and-file workers.

The situation contrasts sharply with that in the US, which has witnessed public outrage at multimillion-dollar severance packages for executives leaving companies wracked by the global financial crisis.

Elpida expects to fall into the red in the six months to last month, posting a net loss of nearly ￥46 billion as chip prices fall and global demand slows.