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SoftBank reported earnings today, including the performance of its $98.6 billion Vision Fund. The numbers were enticing, given the recent exit of DoorDash, which returned billions to SoftBank and represents one of its first truly blockbuster investments out of the fund. The company has now seen 18 investments exit, including 10 fully exited and eight that are now trading on the public markets.

Yet, tucked away deeply in the company’s earnings statement was a note that the company has cut in half the performance incentive earmarked for the Vision Fund’s leadership, from $5 billion to $2.5 billion.

That $5 billion incentive scheme was controversial when news of it was first reported by publications like Financial Times back in April 2018. In the model, SoftBank essentially loaned its employees money to buy into the Vision Fund, a structure that was designed to accelerate the closing of the fund’s $100 billion fundraise. The company first added language about the incentive scheme in its 2018 Q2 earnings, writing:

On October 19, 2018, SoftBank Vision Fund completed an interim closing with additional committed capital of $5 billion. This brought the total committed capital of the Fund to $96.7 billion. The additional committed capital is intended for the installment of an incentive scheme for operations of SoftBank Vision Fund.

Since then, the company has had consistent language about the $5 billion figure in every quarterly earnings report. However, in today’s latest earnings for fiscal 2020 Q3, the company noted that the incentives are now “$2.5 billion (decreased from the previous $5.0 billion).”

The incentive scheme for SoftBank has been a huge point of discussion for industry observers. Four top executives at SoftBank — Rajeev Misra, Marcelo Claure, Katsunori Sago and Ken Miyauchi have collectively been loaned $600 million to buy into the Vision Fund, according to a report two weeks ago in Financial Times. Some of that money was derived from the $5 billion (now $2.5 billion) incentive scheme, although it isn’t clear if all that money was earmarked exclusively from this particular pool.

SoftBank’s pullback on incentives for the Vision Fund is seemingly a response to the fund’s overall lackluster performance and the fund’s disastrous investment in WeWork, which led to wide losses at the telecom group. While more recent performance has been much better for the fund, eliminating some of those incentives should improve overall performance of the fund and ultimately SoftBank’s bottom line.

Vision Fund I has stopped investing in new companies as of last year. A second fund has $10 billion in capital — all from SoftBank itself — and has been making regular investments. The Vision Fund has also been raising SPACs, including two new ones it announced late last week.

This post was first published on: TechCrunch