{"id":44367,"date":"2025-02-17T14:42:35","date_gmt":"2025-02-17T05:42:35","guid":{"rendered":"https:\/\/automaton-media.com\/en\/?p=44367"},"modified":"2025-02-17T14:44:08","modified_gmt":"2025-02-17T05:44:08","slug":"japanese-gacha-game-giant-gungho-dismisses-criticism-of-its-ceo-salary-being-on-par-with-nintendo-rejecting-shareholder-reform-proposals","status":"publish","type":"post","link":"https:\/\/automaton-media.com\/en\/news\/japanese-gacha-game-giant-gungho-dismisses-criticism-of-its-ceo-salary-being-on-par-with-nintendo-rejecting-shareholder-reform-proposals\/","title":{"rendered":"Japanese gacha game company dismisses criticism of its \u201cCEO\u2019s salary being on par with that of Nintendo\u2019s,\u201d rejecting shareholder reform proposals\u00a0"},"content":{"rendered":"\n

Japanese game company GungHo Online Entertainment, best known for their hit mobile title Puzzle & Dragons, has rejected a proposal from shareholders that highlighted numerous issues with the company (as reported by ITMedia<\/a>). These issues included the rising pay of its CEO, which is nearly on par with Nintendo\u2019s, despite GungHo\u2019s smaller scale and declining profits.\u00a0<\/p>\n\n\n\n

At the end of January 2025, Strategic Capital, which owns about 5.4% of GungHo, submitted a somewhat salty and lengthly proposal<\/a> to the company, calling on it to \u201cup its game.\u201d The report highlighted how GungHo continues to rely heavily on their 2012 release Puzzle & Dragons and has yet to produce another hit, despite investing over 100 billion yen (over 640 million dollars) in the development of new titles. It also pointed out how CEO Kazuki Morishita\u2019s pay has increased from 120 million yen to 340 million yen (over $2.2 million dollars) over the last decade, despite the company\u2019s operating profits declining by 69% (for reference, the report notes that global giant Nintendo\u2019s CEO makes 360 million yen).\u00a0<\/p>\n\n\n\n

\"GungHo
GungHo CEO Kazuki Morishita (Image: GungHo official website<\/a>).<\/em><\/figcaption><\/figure>\n\n\n\n

Strategic Capital proposed 7 key points for change, including an overhaul of GungHo\u2019s renumeration system and far more transparency – calling for changes in executives\u2019 pay to be disclosed and explained. <\/p>\n\n\n\n

In their response<\/a>, GungHo announced that their Board of Directors (including outside directors) unanimously voted to reject all of Strategic Capital\u2019s proposals on February 14.  <\/p>\n\n\n\n

GungHo outlines reasons for rejecting each of the proposals. Regarding CEO Morishita\u2019s pay, they argue that the shareholders\u2019 argument \u201cfails to recognize the role that President Morishita has played in achieving the company\u2019s growth, while leading the company\u2019s business as its de facto founder for over 20 years.\u201d Expanding on this point, GungHo\u2019s statement highlights how Morishita brought Ragnarok Online, and has continuously directed Puzzle & Dragons, maintaining the IP\u2019s popularity for 13 years. <\/p>\n\n\n\n

\"Puzzle<\/figure>\n\n\n\n

Regarding the criticism that GungHo has yet to make another game that matches Puzzle and Dragons\u2019 popularity, the company argues that the shareholders don\u2019t understand how highly competitive the mobile game market is and how hard it is to create enduring hits in such an overcrowded market. <\/p>\n\n\n\n

As for the shareholders\u2019 proposals regarding the renumeration system, GungHo responded that their current process for determining base renumeration is already appropriate and transparent enough, and that the level of disclosure requested in the shareholders\u2019 proposal would exceed legal requirements.   <\/p>\n\n\n\n

\"Ragnarok
Ragnarok Online.<\/em><\/figcaption><\/figure>\n\n\n\n

Although they rejected Strategic Capital\u2019s proposals, GungHo has made some changes. It altered its Shareholder Return Policy<\/a> on February 14, aiming to combine stable dividends with flexible share buybacks \u201cin order to implement a more proactive profit return to our shareholders.\u201d It also revised renumeration policy on the same day, announcing that it will appoint independent outside directors to the committee that determines renumeration.  <\/p>\n\n\n\n

On the same day, GungHo released its financial results for the 2024 fiscal year (January to December 2024), which were down across the board: <\/p>\n\n\n\n

Sales: 103,6 million yen (down 17.3% year-on-year)\u00a0
Operating profit: 17,491 million yen (down 37.3% year-on-year)\u00a0
Ordinary profit: 20,013 million yen (down 31.7% year-on-year)\u00a0\u00a0
Net profit: 11,171 million yen (down 32.7% year-on-year)\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Puzzle & Dragons’ developer GungHo has rejected a proposal from shareholders that highlighted numerous issues with the company.<\/p>\n","protected":false},"author":61,"featured_media":44371,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_gspb_post_css":"","footnotes":""},"categories":[3],"tags":[261,17],"class_list":["post-44367","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-financial-news","tag-japan-related-news"],"blocksy_meta":[],"yoast_head":"\nJapanese gacha game company dismisses criticism of its \u201cCEO\u2019s salary being on par with that of Nintendo\u2019s,\u201d rejecting shareholder reform proposals\u00a0 - AUTOMATON WEST<\/title>\n<meta name=\"description\" content=\"Puzzle & Dragons' developer GungHo has rejected a proposal from shareholders that highlighted numerous issues with the company.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/automaton-media.com\/en\/news\/japanese-gacha-game-giant-gungho-dismisses-criticism-of-its-ceo-salary-being-on-par-with-nintendo-rejecting-shareholder-reform-proposals\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Japanese gacha game company dismisses criticism of its \u201cCEO\u2019s salary being on par with that of Nintendo\u2019s,\u201d rejecting shareholder reform proposals\u00a0 - 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