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Failures cost executives half their salaries, bonuses, and retirement pay

2012 was a horrific year for Taiwanese phonemaker HTC Corp. (TPE:2498).  While some its handsets achieved modest sales, such as the 5-inch Droid DNA, HTC's smartphone market share plunged nearly 20 percent and its stock was beaten down 40 percent.  One particular nasty blow came when Apple, Inc. (AAPL) secured a ban on U.S. sales of HTC handsets in May 2012, shutting down its rival's biggest market.  HTC had been the top smartphone seller in the U.S. for much of 2011.

As a result of these failures, HTC's executives took a big hit to the purse in 2012, according to The Wall Street Journal.  The newspaper is quoting HTC officials as stating that executive compensation -- including salaries, bonuses, and retirement pay -- dipped to NT$660.5M USD ($21.89M USD) in 2012, down 51.4 percent from NT$1.36B ($45.1M USD) in 2011.

Two of the hardest hit are still with HTC -- HTC CEO Peter Chou and president of engineering Fred Lui.  Their compensation dropped to an even NT$100M ($3.32M USD) -- the lowest level in two years.  Mr. Chou made waves early this year when it was revealed that he vowed to resign if the company's next flagship device did not sell well.

Taiwan Dollars
Poor performance led to a big paycut for HTC executives in 2012. [Image Source: Reuters]

However, the cuts across the board may have driven out some executives.  HTC is rumored to have bled a variety of executive, artistic, marketing, and engineering talent in 2012, as employees jumped ship for more lucrative offers.

After the boom years of 2010 and 2011, which featured meteoric growth, and the disappointment of 2012, 2013 seems to be off to a modest start for HTC thus far.  Despite the flop of the HTC First "Facebook Phone", the company has seen strong sales of its HTC One flagship device, which should help to further stabilize the company's tepid financials.

HTC is rumored to have paid Robert Downey Jr. (who plays Marvel superhero Iron Man) $12M USD to be the face of a new ad campaign for the phonemaker.  HTC is looking to compete with the marketing pull of South Korea's Samsung Electronics Comp., Ltd. (KSC:005930), who is offering 1 million copies of the new Jay-Z album to Galaxy S IV buyers.

Source: The Wall Street Journal





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