The SoftBank Group held the 40th Ordinary General Meeting of Shareholders on June 25th. From the perspective of preventing the spread of the new coronavirus (COVID-19), all proceedings are being carried out by live distribution without convening shareholders. Shareholders gave harsh opinions such as "low dividends on shares," "high executive compensation," and "the chairman should return compensation."
This general meeting of shareholders was broadcast live on the homepage and official SNS accounts (Twitter, YouTube). At the beginning, about 10 minutes, the SOFTBANK Group's 2019 business report was made.
The contents were that the operating loss was 1,364.6 billion yen (deterioration of 3.4 trillion yen from the previous year), the net loss was 961.6 billion yen (deterioration of 2.4 trillion yen from the previous year), and the uncertainty due to the new corona in FY2020. Dividends are undecided, the cumulative investment loss of Softbank Vision Fund (SVF) has reached 0.1 trillion yen, and the US telecommunications carrier New T-Mobile (due to the merger of Sprint and T-Mobile) Birth) became an equity-method affiliate, and announced a program to earn up to 4.5 trillion yen by selling and monetizing owned assets for the purpose of large-scale shareholder returns and financial improvement. If it is a traditional style of general meeting of shareholders, it may have been a heckler from the shareholders.
Next, we spent 45 minutes on our future business strategy. What was said there was that the SoftBank Group would lead the digital shift accelerated by the corona crisis.
It is an online service that has begun to permeate all fields such as online conferences, delivery, education, medical care, shopping, and entertainment, but the SoftBank Group is investing in the companies that are responsible for it, he explains.
Here, "I think that the concern of shareholders is whether SoftBank is okay. It is a legitimate concern because it has the largest deficit in history," says Mr. Son.
He reiterated that "The SoftBank Group has been reborn as a'strategic holding company'with various businesses under its umbrella. Therefore, the most important indicator is not the operating profit (which was in the red) but the shareholder value." To do.
Then, I would like to introduce the latest data and tell you that "operating profit is not a big problem for me. I would like to tell you that the value of the stocks I own has improved a lot as of today. I appealed that the shareholder value has increased compared to before Corona.
Finally, we spent 35 minutes on questions and answers from shareholders. From the questions asked, Mr. Son selected and answered the questions that seemed to be of great interest to shareholders.
――I've been talking about retiring from company management in your 60s, is that true?
Masayoshi Son (hereinafter referred to as “Son”): That feeling has not changed. I was about 62 or 63 years old now. So there are 7-8 years left.
Well, when I'm about 69 years old, medical science is progressing at that time, so maybe it's a little over (laughs). Strictly speaking, don't say, "You're leaving, because you promised," after your 69th birthday. I would like to revise that I promised that way.
It depends on my health and the situation of the company, so please do not blame me if it is a little different. I will put up a preventive line now.
――With the economic environment changing rapidly, isn't there a limit to relying on the individual abilities of the president?
Son: Regarding my abilities, to be honest, I'm quite confident (laughs). He is overconfident and often scolds him for being irreverent even though he is a grandchild. I'm too confident and criticized as a one-man, but I think self-confidence is important.
With so many groups, the individual's abilities should not be the limit. Therefore, we have many employees and executives exert their full potential and bring them together.
Marcelo Claure, Rajeev Misra, Yoshimitsu Goto (while introducing their achievements). Without them, Softbank would have suffered a lot. I am sincerely grateful. If you list each one, it will take about 20 hours more, so I will leave it around here, but I will continue to improve it in total war.
--The dividend amount is too low.
Son: We announced that there may be no dividends as of the end of March. To be honest, I don't want you to expect dividends for the time being.
Of course, I want to pay a dividend someday. We have funded 4.5 trillion yen, but announced a share buyback as a shareholder return rather than a dividend. Shareholder returns are on the scale of 2.5 trillion yen, which I think is the largest in the Japanese market. It is unique in the world. Focusing on this, we will carefully return profits to shareholders.
--High executive compensation.
Son: I would like to continue to pay a lot of executive compensation. I would rather increase it. My executives are expecting it, so I'll say it moderately. If you work diligently to increase the corporate value of your company, and if the value of your shareholders increases, some percentage of it will be generously paid to the employees and executives who have contributed.
That was my way of thinking. Then, shareholder value should grow energetically. So, in return, I want to pay the executives a lot. Japanese companies have too little executive compensation. It has become a total office worker, and large companies are steadily losing their power.
In that regard, I think it is linked to the reward experience. The Japanese are serious and detailed, and do not take risks. I'm scared. I'm afraid of debt. But I have a surplus of money. I'd like to say why you don't take risks, and companies that don't take risks won't grow. It is a youth's claim. I'm no longer a young man, but my heart is a young man. When I bought Sprint, I had only 400 billion yen in cash. But I borrowed more than 2 trillion yen and attacked. The ship was about to sink on the way, but arrived safely at the shore. Then the 400 billion yen he had would have increased about five times.
If you are confident that you can overcome it, you should go take the risk. If you don't, you won't get results. When the results are achieved, executive compensation will be distributed to the dying executives who have taken risks. By doing so, you can embark on your next risky voyage.
I'm sorry, I can't stop when I start giving a speech, so let's move on.
--You should lend an umbrella to the company that will be responsible for tomorrow during the corona shock.
Son: There is an expression that banks that don't lend umbrellas when it rains are not good. I would like to say that to Softbank.
But we are not a money lender. We invest in venture companies. It is not based on collateral, but invests in view of the future potential of the company.
So it's more risky. Still, we don't invest in companies that bring in picturesque rice cake-like business plans. That's an unreasonable story. If you make a mistake, it will be like WeWork. WeWork is desperately trying to get up and is making good progress. At least I don't want to give out cash to bail out the company. Invest because it will grow. I think it's very likely that we'll be able to see the clear sky soon, so we'll provide an umbrella.
――Do you have the right to make management decisions, make it a group company, or sell shares to SVF companies in the future?
Son: As a general rule, SVF sells shares. The investment period is 12 years, and even if it is extended, it is a contract of 2 years. The funds invested up to that point will be recovered by selling the shares. In some cases, it is possible that some companies will be the core companies of the group. That is the basic idea of venture capital.
--What is your policy for buying back shares?
Son: As announced on March 23, we announced a share buyback of 2.5 trillion yen. For that purpose, 80% of the cash of 4.5 trillion yen of military funds has already been obtained. The remaining 20% is in sight.
――I want you to pursue more synergies with your investment destination.
Son: Synergies cannot be enforced. It means that they own 20 to 30% of the shares. I also own about 25% of Alibaba's stock, but I have never forced Alibaba to synergize.
But even if you don't force it, a great company will grow brilliantly. If you make many business alliances that generate synergies, the results will be everywhere. It's something to encourage.
Blood is thicker than water, but they make us happy as major shareholders. There is a good sense of sontaku there. I think this is a family company.
--We Company, OneWeb should take responsibility for the huge loss and return the reward.
Son: My greatest responsibility lies with me. Even at WeWork, executives, employees, and many people were against it from the beginning. Some were angry. In the end, everyone agreed and invested, as I said back. I have the greatest responsibility to overcome the opposition. Therefore, the reward from Softbank is decreasing.
When I was consulted by personnel about compensation, I told him that "I can be zero", but due to various problems, I made it about 100 million yen. Until then, it's about 200 million yen. Certainly, that was the case.
In addition, about 100 million yen is donated in full. So the reward from Softbank is virtually zero. If so, there is no further salary reduction.
So how do you punish? The drop in Softbank's stock price is one of the biggest salary reductions for me. It bothers shareholders and is the biggest punishment for me. If investors say, "Let's discipline him more," the stock price will go down even more. If you think that there is a big success in another thing, the opposite goes up. We ask our shareholders to make decisions every day.
――The transparency of the general meeting of shareholders is doubted in the question and answer session by live distribution.
Son: The new Corona makes it difficult for people to get together. Once converged, we will have the opportunity to meet our shareholders directly and ask for their opinions at random. Feeling the same air in the same room. I hope that such a time will come soon.
Softbank and Yahoo also distributed the general meeting of shareholders online, but the number of simultaneous viewers was about 40,000. I've never had the opportunity to get so many people together and ask questions. It was my first attempt to be completely online, but I think more people were able to participate in the internet.