Sony CEO Pledges Turnaround in 2014, Dismisses Entertainment Sell-Off Suggestion
Former U.S. Ambassador to Japan and Obama ally John Roos was approved as a new director on Sony's board.
TOKYO – Sony CEO Kaz Hirai promised shareholders that he would complete his restructuring of the struggling company this year, while rejecting a suggestion to dispose of the entertainment division, at their annual meeting in Tokyo on Thursday
The meeting began, after an introduction from CEO Hirai, with an apology from chief financial officer (CFO) Kenichiro Yoshida for the losses occurred in the year to March. Yoshida pointed out that while sales had increased nearly 15 percent, this was due largely to a weaker yen, and that Sony had registered another year of operating losses.
Hirai returned to the podium to set out his plan for returning Sony to the black.
"The entertainment and financial sectors posted results that exceeded our expectations, we were not able to turn around our electronics businesses," said Hirai. "And the strong results in entertainment and financials were not able to make up for the losses in other areas."
"I have set the current financial year 2014 [to March 2015] as the one when the revitalization and structural reform of Sony is completed," said Hirai.
Skeptics will point out, however, that similar pledges have been heard before from Hirai, as well as from his predecessor Howard Stringer. A shareholder later asked Hirai for a commitment to resign if the implementation of his plan is not successful, to some shouts of approval. However, Hirai appeared to still have the trust of the majority of the 4,600 shareholders in attendance, who mostly applauded his speeches and answers.
Nearly 10,700 shareholders attended last year when Sony was under pressure from Daniel Loeb's Third Point hedge fund to sell-off part of its profitable entertainment division. The fact that Sony was not this year distributing the small gifts it has traditionally given to attendees may have also contributed to the lower numbers.
Sony faced only one question this year about selling a stake in its entertainment division, to which Hirai replied that doing so would disrupt synergies and slow down decision making.
Another shareholder questioned why the kind of wearable display sported by Tom Hanks in Sony's Angels & Demons was not yet on the market.
"Sony is working on a number of wearable devices, with the first likely to work as an accompaniment to a smartphone," replied Hirai. "Though we are not ready to make an announcement yet."
Former U.S. Ambassador to Japan John Roos, a Silicon Valley lawyer and close ally of President Obama, was among the new directors elected to the board of Sony Corp. at its annual shareholders meeting in Tokyo on Thursday.
The slate of new directors, including a retired vice minister of economy, trade and industry; Koichi Miyata, senior executives from other Japanese corporations and Yoshida, Sony's (CFO), was approved by a margin of more than ten to one.
Sony is still forecasting another $490 million (￥50 billion) of red ink for the year to March 2015,