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Nikesh Arora to invest $482M in SoftBank

Nikesh Arora

Nikesh Arora

Nikesh Arora, president and COO of SoftBank Group Corp (SoftBank), said on Wednesday that he would make a personal bet on the Japanese telecom and internet giant by investing JPY 60 billion ($482.2 million or Rs 3,147 crore) to buy shares of the company over the next six months.

Based on the current share price, Arora will pick close to 0.7 per cent of SoftBank which would make him arguably the second-largest individual shareholder of SoftBank.

SoftBank founder and CEO Masayoshi Son owns 19.26 per cent in the company with other large shareholders being institutional investors.

India-born Arora said, “My past year with the SoftBank Group has been very rewarding. As a measure of my commitment, I have decided to take a personal bet on the SoftBank Group and ensure an alignment of vision, with our founder and chairman and CEO Masayoshi Son.”

He added: “This is a large transaction for me, and involves taking an enormous risk in my life once again. However, I am extremely confident about the future of the SoftBank Group and the long-term objectives that we have set out.”

Masayoshi Son said, “I am delighted that Nikesh has decided to double down on his partnership with me at the SoftBank Group. As I have said, his vision and mine are aligned and we plan to work together for many years to make the SoftBank Group a sustainable success for decades to come.”

Son said he expects Arora to succeed him at the appropriate time.

“The last year of working together could not have gone better and it has surpassed every expectation that I had. Nikesh is a great business leader, a wonderful complement to me, and he’s a good person at heart,” he added.

Arora to own a slice of his big pay master

SoftBank paid Arora about JPY 16.5 billion or $137.7 million in executive compensation for the year ended March 31, 2015. It is arguably the highest sum raked in by an India-born professional ever in a single year and one of the highest globally for a public listed firm last year.

It is not uncommon for tech firms to pay huge sums to their top bosses—Oracle’s founder and former CEO Larry Ellison has been raking in hundreds of millions every year—but what is unusual is that a Japanese firm paid such a large sum. Japanese firms are considered conservative when it comes to top management remuneration.

Nissan Motor CEO Carlos Ghosn, one of a few expat bosses of a Japanese major, who pocketed under $10 million in the year ended March 31, 2014, was the highest paid executive in the country for the fourth year running.

Arora’s compensation included $121.1 million in short-term benefits (cash plus others) besides $16.6 million of stock-based compensation.

Arora’s remuneration was much higher than that of Microsoft CEO Satya Nadella ($84.31 million for 2013-14), PepsiCo CEO Indra Nooyi ($22.41 million), Adobe systems CEO Shantanu Narayen ($18 million) and former Deutsche Bank co-CEO Anshu Jain ($7.2 million for 2014).

Arora had joined SoftBank from Google last year as vice chairman besides having direct responsibility of SoftBank Internet & Media Inc (SIMI) as its CEO. He was recently elevated to a new role of COO and president of SoftBank strengthening his position as the de facto number two in the Japanese firm behind founder and CEO, Son.

Prior to joining SoftBank last September, he was senior vice president and chief business officer of Google. He is now one of the four non-Japanese in the 14-member board of SoftBank.

Before joining Google, Arora was senior adviser of value creation at Silver Lake Partners. Earlier, he had also served as chief marketing officer and a member of the management board of T-Mobile International AG & Co. Besides, he had worked at Deutsche Telekom AG, Putnam Investments, Fidelity Investments and Colgate-Palmolive Co. Arora had also founded T-Motion Plc, a mobile multimedia subsidiary of T-Mobile International.

In addition, he had served as a non-executive director of India telecom major Bharti Airtel from 2008 to 2014.

Arora holds an MS degree from Boston College and an MBA from Northeastern University in the US. He also has a bachelor’s degree in Electrical Engineering from IIT (BHU) Varanasi.

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