Softbank boss steps down from Alibaba board
Softbank Group chief executive Masayoshi Son is to step away from his position on the board of Alibaba, as he defended the firm’s financial health and prospects.
Son said he sees the move as “graduating” from Alibaba, a month after the e-commerce firm’s founder Jack Ma resigned from his own position on Softbank’s board.
Son invested $20m in Alibaba two decades ago, and at the beginning of this year Softbank held approximately $100m in Alibaba shares. However the group has been winding down its stake in Alibaba this year, as part of a $41bn share buyback and debt reduction plan.
Son said the group’s buyback spending had now reached $35bn, or 80 per cent of the planned total, following the first closure in a series of transactions to sell off its stake in T-Mobile US this week.
It plans to net almost $21bn from selling its stake in T-Mobile. Part of the deal will see some of the shares transferred to T-Mobile’s parent Deutsche Telekom, giving the German group majority ownership of the business.
Son said the value of Softbank’s corporate holdings had now risen back to pre-coronavirus levels, with the merger of Softbank-backed Sprint and T-Mobile in April providing an internal rate of return of 25 per cent.
The major spending plan is part of Son’s strategy to return the group to financial health, after it swung to a record annual loss in March as a result of a number of soured bets made by its star Vision Fund.
Son said he had reduced his own compensation, but defended the high pay packets of other executives such as Vision Fund head Rajeev Misra whose annual salary was more than doubled to $15m last month.
“We have worried a lot of people who thought that Softbank is finished or is ‘Softpunku’,” Son told a shareholder meeting, using a play on the word “puncture” used colloquially in Japanese when something is broken.
He added that other firms should overhaul compensation plans to reward risk-taking, despite the Vision Fund’s own risky bets being largely responsible for Softbank’s financial difficulty.
“What are you scared of?” he said during the presentation.