Got It All

A Top SoftBank Executive Wants $2 Billion in Pay. His Boss Disagrees. – The New York Times

Supported by
The SoftBank founder, Masayoshi Son, is locked in a dispute over compensation that his key deputy, Marcelo Claure, insists he should be paid.
Send any friend a story
As a subscriber, you have 10 gift articles to give each month. Anyone can read what you share.

SoftBank, the Japanese conglomerate that became synonymous with freewheeling spending on unprofitable technology start-ups including WeWork and Uber, is trying to spend less money — starting with one of its own top executives.
Marcelo Claure, the firm’s chief operating officer and a close confidant of the SoftBank founder and chief executive Masayoshi Son, is seeking roughly $2 billion in compensation over the next several years, according to four people with knowledge of the discussions who were not authorized to speak publicly on pay issues. Mr. Son and other senior SoftBank executives in Japan are seeking to pay Mr. Claure a much smaller sum — tens of millions of dollars at most.
The unusually large amount at stake reflects Mr. Claure’s singular role at SoftBank, where he has been part Mr. Fixit and part ambassador — untangling messy investments, scouting out lucrative opportunities and wooing start-up founders — since joining in 2017. He arrived after running the telecom company Sprint when asked to do so by Mr. Son.
Mr. Claure has insisted in private conversations with individuals inside and outside SoftBank that he was owed the $2 billion for various cleanup jobs, including straightening out SoftBank’s investment in WeWork, the office-space leasing giant that went public in October. The amount also reflects Mr. Claure’s estimate of the future value he could bring to SoftBank, one of the individuals said.
But Mr. Son and other SoftBank executives are worried that anything approaching such a gigantic payday would raise the hackles of investors in Japan, where the conglomerate’s stock trades and where big payouts to executives are generally frowned upon. Already, Mr. Claure — who made $17 million last year — was one of the highest-paid executives in Japan in recent years. Even in the United States, few executives of publicly traded companies are paid more than $1 billion in salary and stock awards in a single year. In 2020, only Alexander Karp, the chief executive of Palantir, had a total pay package of more than $1 billion.
Moreover, SoftBank, which has a market capitalization of around $85 billion, is battling a drooping stock price. Its shares have fallen more than 35 percent this year after a regulatory crackdown in China that has weighed on Chinese stocks. Alibaba, the Chinese online retailing behemoth, is SoftBank’s largest holding.
“SoftBank and Marcelo Claure are actively engaged in discussions about his role at the company and his compensation,” SoftBank said in a statement. “Marcelo is an important executive at SoftBank who has helped with many important initiatives.”
Some SoftBank executives are also peeved at another lucrative activity of Mr. Claure’s, even though the firm cleared it: He occasionally made personal investments in start-ups that he also introduced to SoftBank. When SoftBank later invested in some of the same start-ups at much bigger valuations, the value of Mr. Claure’s personal investments rose handsomely, giving him millions of dollars in profits — at least on paper. The firm’s chief financial officer, Yoshimitsu Goto, is among those who have complained to Mr. Son about the matter, according to two of the people.
Although it’s not unheard-of, many companies discourage this type of personal investing because it can cause a conflict between the employee’s interests and the firm’s — or even create the appearance of one.
“You’re walking terribly close to the line between legal and illegal and ethical and unethical,” said Aswath Damodaran, a professor of finance at the Stern School of Business at New York University. Typically, investment managers are required to act in the best interest of all their shareholders, and personal investments are therefore frowned upon.
Mr. Claure and SoftBank have been locked in the pay dispute for weeks, working with their own teams of lawyers. The negotiations, which could go on for weeks more, have frayed the close ties between Mr. Son, 64, and Mr. Claure, 50 — so much so that Mr. Claure could leave SoftBank in the coming months whether or not he receives the compensation he is seeking, the four people said.
Mr. Claure declined to be interviewed.
Mr. Damodaran added that Mr. Claure’s departure could have an outsize impact on SoftBank, as the conglomerate has few formal decision-making processes in place. “SoftBank is a personality-driven company,” he said. “They make big investments based on somebody’s gut feeling.”
Mr. Son founded SoftBank in 1981, building a large conglomerate in his native Japan that housed software distribution, wireless and magazine publishing businesses. In the 1990s, he made a big push into the United States, riding the dot-com boom to briefly become the richest person the world. He gained a reputation for paying big prices for technology start-ups, before losing the vast majority of his fortune when the bubble burst.
Mr. Son mostly retreated from the United States until 2012, when he announced a $22 billion plan to buy a majority stake in Sprint, hoping to merge it with T-Mobile to make the company a major player in the wireless industry.
The next year, Mr. Son met Mr. Claure when SoftBank paid about $1.3 billion for a majority stake in Brightstar, a smartphone distributor that Mr. Claure had founded and transformed into a global company. Raised largely in Bolivia, Mr. Claure had already built a regional cellphone distribution business in the Northeast before starting Brightstar.
Impressed by Mr. Claure’s ambition and hustle, Mr. Son tapped him to run Sprint, which was losing cash, bleeding subscribers and badly lagging its larger rivals, AT&T and Verizon. Mr. Claure took over as Sprint’s chief executive after regulators thwarted its planned merger with T-Mobile. He stabilized the company and eventually resuscitated a deal with T-Mobile in 2018. SoftBank has said it has already made more than $12 billion on its investment. SoftBank’s investment in Brightstar was far less profitable, and it sold its stake last year for several hundred million dollars, three people with knowledge of the deal said.
In 2019, Mr. Son tapped Mr. Claure for help when yet another big bet by SoftBank turned disastrous. By then, SoftBank had raised about $100 billion for its Vision Fund. With backing from Saudi Arabia’s sovereign wealth fund, the technology investment fund — the largest of its kind in the world — sought to take stakes in cutting-edge tech companies in the United States and globally.
SoftBank and the fund had bet roughly $9 billion on WeWork, the co-working company that was on the verge of bankruptcy after a failed attempt at an initial public offering that fall. Mr. Claure negotiated directly with the WeWork co-founder and chief executive, Adam Neumann, on a severance package in which he was paid roughly $180 million to give up his excess voting control of the company.
Mr. Claure later helped recruit Sandeep Mathrani, a veteran of the real estate business, to lead WeWork as chief executive and put the company on a path to a successful public offering. WeWork ultimately went public through a special purpose acquisition company, or SPAC.
As WeWork stabilized, Mr. Claure spent more time canvassing the world for new investment opportunities for himself and SoftBank. He personally invested about $15 million this year in Sorare, a company that uses so-called nonfungible tokens, or NFTs, to help people bet on fantasy football games, at a valuation of around $2 billion. In September, Sorare announced that SoftBank’s Vision Fund and others had invested in it at a valuation of roughly $3.7 billion. Mr. Claure continues to hold his stake, according to two people familiar with his investment.
On at least two other occasions, Mr. Claure has personally invested in companies ahead of SoftBank. In April, SoftBank led a $1 billion investment in a deal that merged Grupo Televisa’s television content business and Univision Communications to create the largest Spanish-language media company in the world. Mr. Claure, who became the vice chair of the merged entity, had invested in Univision alongside SoftBank previously. Mr. Claure continues to hold his personal stake, which has risen in value in the merged entity.
In another instance, Mr. Claure held several discussions with executives from Binance.US, the U.S.-based subsidiary of, the world’s largest cryptocurrency exchange, according to three people with knowledge of the discussions. He told them that he planned to invest personally and that SoftBank would likely come into its next round of funding. Neither Mr. Claure nor SoftBank ultimately invested in Binance.US.
SoftBank has been aware of and cleared Mr. Claure’s personal investments. Mr. Son himself hadn’t been concerned about personal investments, saying it was fine for executives to make their own returns as long as SoftBank did, too, according to a person close to Mr. Son.
However, the conglomerate recently changed its policies so that executives have to sell their stake back to SoftBank at cost to avoid potential conflicts of interest. In October, SoftBank took a stake in Digital Currency Group at a $10 billion valuation. Mr. Claure had invested in the cryptocurrency company months earlier when it was valued at $8 billion. He sold his stake at the lower price.
Emily Flitter contributed reporting.


Leave a Comment

Your email address will not be published. Required fields are marked *