Posted 2 years ago on March 16, 2012, 9:19 a.m. EST by XenuLives
from Charlotte, NC
This content is user submitted and not an official statement
Good for this board of directors and CEO for cutting their own pay instead of simply firing even more people. That was the right thing to do.
THQ is definitely experiencing some troubles related to its uDraw flop and subsequent layoffs, as evidenced by a new document filed with the Securities and Exchange Commission. President and CEO Brian Farrell will take a pay cut for the year starting February 15, which reduces his salary from $718,500 to $359,250. His salary will go back up the next year.
His golden parachute has also been tailored a bit more closely, as the payment he'd receive upon departure from the company (either termination "without cause" or resignation with "good reason") has been cut from three times his highest-ever bonus to just his highest-ever bonus. This is, of course, a small sacrifice compared to the THQ employees whose salaries went from "some" to "none."
The board of directors is also seeing some cuts: all the other directors have "elected" to receive 50% less cash compensation for a year effective today.
As reports of THQ’s financial difficulties continue, a SEC filing has revealed that CEO Brian Farrell has taken a 50% pay cut, and 240 staff members will be made redundant across the business. Meanwhile, in Melbourne, THQ’s local office is continuing to struggle.
According to the filing, Brian Farrell’s pay has been reduced drastically, and he has removed certain pay out clauses from his contract. His annual base salary has been reduced from “$718,500 to $359,250, for a one-year period beginning February 13, 2012″, and lump sum bonuses have been reduced.
It’s most likely a responsible decision considering the report also states that a “a realignment of [THQ's] organizational structure” will result in up to 240 redundancies. The majority of these redundancies have already been announced — the lay offs at THQ’s Australian office is part of that first batch — with the remainder being implemented by September 30 this year.
This “realignment” is expected to cost THQ up to $11 million, with the majority ($8 million) being allocated to “severance costs” for laid off employees.
THQ’s Melbourne office in Australia was hit with 14 redundancies, but further reports state that THQ is on the verge of losing the many of the local distribution deals it has with other major publishers.
In Australia, Capcom’s titles are distributed by THQ. According to a source within THQ, Capcom has had issues with regards to the handling of its games in Australia. The source stated that Capcom would “almost certainly shop their contract around as they weren’t happy”.
Another of THQ’s deals, with Disney, is due to expire and we’ve been informed that Disney will also most likely move on as a result of the lacklustre sales of Disney Universe locally in Australia, sales which were “far below expectations.”
The Australian THQ office has cut projected profits by 50%.
UPDATE: We’ve just had an official response from THQ Australia, who stated that the information regarding the distribution deals with Capcom and Disney was false, and that they fully expect those relationships to continue.