Honda Motor Co. President Toshihiro Mibe saw his executive compensation reduced to 173 million yen [1] following the company's first deficit since listing.
The pay cut signals a rare admission of failure from one of Japan's most influential automakers as it struggles to navigate the global transition to electric vehicles.
According to a securities report released Thursday, the company recorded a significant loss for the 2025 fiscal year, ending March 2026 [2]. Reports on the exact scale of the deficit vary; one source cites a loss of 423.9 billion yen [5], while another reports the loss exceeded 1.5 trillion yen [6].
To clarify responsibility for the losses, the company substantially reduced performance-linked compensation [3]. Mibe's performance-based pay dropped from 322 million yen last year [2] to three million yen this year [2]. Vice President Noritaka Kaibara also saw his compensation decrease by more than 30% [4].
"To clarify responsibility for the losses," the company said in its securities report [3].
Mibe previously said that the company failed to adapt to rapid industry changes [7]. This financial downturn follows a strategic pivot in May 2026, when Mibe announced that Honda would retract its previous goal of producing only battery electric vehicles (BEV) and fuel cell vehicles (FCV) [8].
The company is now attempting to stabilize its finances while redesigning its electrification roadmap. This includes plans to introduce new models, and invest 715 billion yen over a specific period to recover its market position [5].
“To clarify responsibility for the losses”
The unprecedented nature of this deficit—the first since Honda went public—demonstrates the high cost of miscalculating the speed of the EV transition. By slashing executive pay and abandoning its all-BEV/FCV mandate, Honda is shifting from an ideological pursuit of zero-emissions to a pragmatic survival strategy focused on financial stability and a diversified powertrain approach.
