SoftBank CEO Owes His Own Company $5 billion

(Photo credit: MIKI Yoshihito/Flickr)

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You know how some chief executives cut their own compensation when things aren’t going swimmingly if only to signal they “get it”? Masayoshi Son, CEO of SoftBank, doesn’t really have that option. And therein lies a story.

Son owes his massive Japanese holding companies an astounding $5.1 billion on side deals he made with the aim of complimenting his salary, Bloomberg reports.

Silicon Valley’s Sugar Daddy

SoftBank is famous for two things: busting out ostentatious slideshows with cartoon unicorns at its earnings calls, and bankrolling half of Silicon Valley through its “Vision Fund.” Son spearheaded the Vision Fund’s tech-enamored strategy, leading the charge on investments including Uber (which is actually doing okay at the moment, although SoftBank dumped all its shares last August) and WeWork (which hasn’t been doing well, maybe ever).

With the tech industry’s fortunes looking much shabbier than in previous years, the Vision Fund has been taking a serious beating. This week it posted a net loss of $5.9 billion for Q4, its fourth quarterly loss in a row. Not only were there no cartoon unicorns this quarter, but Son himself also did not attend the company’s earnings call for the first time ever.

While he was pouring billions into US tech, Son was also taking personal stakes in the companies SoftBank was investing in, borrowing against his SoftBank shares to do so:

  • Son holds stakes in three separate vehicles at SoftBank of 17.25%, 17.25%, and 33%.
  • The personal stakes have raised eyebrows in the past, but Son has advocated for side deals on the basis that they give a way to beef up executive pay packets, which are much lower in Japan on average than elsewhere.

Of course, there’s still time for Son’s investments to turn around, and according to Bloomberg, there’s no upcoming deadline for him to pay back the debts.

Wage Against the Machine: While Son was able to artfully plump his compensation, Japan’s workers have been dealing with a worrying case of stagflation, with some workers not seeing a raise in 30 years. Last month Prime Minister Fumio Kishida urged companies to ratchet up their employees’ wages. Fashion retail giant Uniqlo was quick to respond with a raise of as much as 40% for some workers in January, and this week Nintendo followed suit with a 10% raise despite profits looking like they got hit with a Mario Kart blue shell.