GMO Internet cuts CEO pay after massive cyberattack exposes cloud data

GMO Internet Group cut its chief executive’s salary by 30% on Monday after acknowledging a major security failure that allowed hackers to drain customer accounts. The Tokyo-based company holds itself responsible for the breach that affected its Onamae.com Desktop Cloud service.

CEO Masatoshi Kumagai and other executives bowed deeply at a news conference in Tokyo to apologize for the incident. The company confirmed that the cyberattack resulted in more than 26,000 cases of leaked information and unauthorized transactions. Many of these transactions were initiated by the attackers rather than the customers. Dozens of securities firms and other businesses suffered losses.

Kumagai stated that the company had received internal warnings about a systemic weakness to such attacks but failed to act. He apologized for recent social media posts, including one photo of him smiling, which he admitted may have offended victims. He said, "I offer my deepest felt apologies," and emphasized that the firm is taking the problem seriously.

The company promised to pay 5,000 yen, or about $30, to all customers as a gesture of goodwill. It also committed to covering specific losses and switching to a new security system. GMO refused to pay the ransomware deployed by the attackers. To identify the perpetrators, the firm launched a cybercrime bounty site offering $1 million for information. As of last week, the company received more than 400 submissions in English, Japanese, or Chinese.

The breach has drawn attention to Japan’s cybersecurity infrastructure. Prime Minister Sanae Takaichi has pledged to strengthen national security measures, though the government has declined to comment on the specific suspects in the GMO case. The incident occurs as global concerns rise, following a report that Binance lost over $6 billion in a separate heist attributed to a North Korean hacking unit.

GMO stocks have fallen 17.5% this year. The shares declined further after the news of the cyberattacks surfaced. The news conference began after trading closed in Tokyo, leaving the immediate financial impact on the company’s results unclear.

Kumagai, who founded the company in 1991, spoke tearfully about the team’s efforts to bring technology to customers. He noted that other top executives are also taking smaller pay cuts for three months.