Bandai Namco Revamps Executive Pay Structure to Focus on Performance

Bandai Namco Holdings announced a significant change to its executive compensation system on May 8. The Japanese entertainment company is shifting to make executive salaries more dependent on actual performance and results.

Under the new payment structure, only 30% of executive pay will be fixed salary. The remaining 70% will be tied directly to performance metrics. This marks a notable change from the previous 40:60 structure.

The company is also increasing its emphasis on stock-based compensation. Now, 50% of total executive earnings will be provided in company stock rather than cash. This represents a 10% increase from the previous 40% allocation.

Bandai Namco has placed specific limits on executive compensation components. The fixed base salary for executives will be capped at approximately $4.14 million per year in total. Interestingly, a portion of this base salary will automatically be directed into a shareholding plan to purchase company stock.

The bonus structure has been completely redesigned as well. The new system ties bonuses directly to specific company targets related to profits, earnings per share (EPS), and sustainability metrics.

The company has also introduced a strict ceiling on total bonus payouts, limiting them to either $4.14 million or 1.5% of net income attributable to shareholders—whichever is lower.

This shift comes even as Bandai Namco reports record-breaking profits for the previous fiscal year. Instead of rewarding short-term success with immediate gains, the company is using the moment to reinforce its commitment to long-term sustainable growth.

Source: Automaton