Road ahead is very challenging for Sony CEO

TOKYO, JAPAN: When Howard Stringer took over the helm at Sony Corp's sprawling fiefdom stretching across movie-making to games and life insurance, his mission was to mould these disparate elements into a cohesive global group.

Five years later, analysts are still not sure whether the Welsh-born former TV producer is worth a $4.5 million salary, which makes him one of the highest paid executives at a Japanese firm.

Stringer, picked by his predecessor for his experience with movies, TV and other content, has struggled to significantly improve Sony's competitiveness and has taken a dig at his Japanese managers' failure to eliminate corporate bureaucracy.

Sony is betting on rising demand for new products like its 3D TVs and its Move motion-controlled gaming device that goes on sale in September to pull it out of the doldrums. This follows a round of cost-cutting analysts say only an outsider could have tackled.

"He was in a better position to do this, because it's hard to fire people you've worked with all your life," said analyst Nobuo Kurahashi of Mizuho Investors Securities Co, referring to the Japanese tendency to spend their career with one company.

"I think he's taking the company in the right direction, but it's too soon to know whether it will work out," he added.

For a company that has fallen behind Apple Inc's iPod in portable music, Nintendo Co in videogames, the Oxford-educated Stringer, now 68, still has a big challenge.

Stringer, who at CBS helped boost Dan Rather to the top of U.S. news ratings and wooed comedian David Letterman from a rival network, spends about half his time in Japan, the company says.

Stringer had ended up ousting president Ryoji Chubachi last year and has been putting his own allies in key positions, to help take the company in a new direction, closing factories and overhauling management structure along the way.

On Friday, when Sony announced Stringer's lavish pay package for the first time, there were some grumbles but little overt anger from the nearly 8,000 mostly elderly shareholders at the annual meeting in a Tokyo hotel.

Japanese style of working

"When Stringer first joined, he wasn't able to do everything he wanted," said Mizuho Securities analyst Ryosuke Katsura.

"There were layers of Japanese management in the way. Then after the Lehman shock the middle management disappeared. So he's only been able to get his own way for about the past year. He's been selling off assets and so on, but it's a bit early to judge him."

Sony, the inventor of hit products of yesterday - including the Trinitron TV and Walkman cassette player - has suffered two consecutive years of losses, but forecasts a return to the black for the year to March 2011.

Stringer told shareholders on Friday he felt he'd succeeded in unifying the company after years of effort.

"Now I think the contents companies are performing for the benefit of the hardware company," he told the shareholders' annual general meeting.

"In 3D, internet TV and Blu-ray, all the elements of Sony work together. They are in effect integrated," Stringer said. "We are poised for success."