Nissan CEO forced out over inflated bonuses row
Nissan Motor CEO Hiroto Saikawa will step down over a scandal involving inflated stocklinked bonuses, deepening the turmoil that has enveloped the carmaker since the arrest of former chair Carlos Ghosn.
Saikawa, Ghosn’s handpicked successor as CEO, will exit on September 16 after Nissan’s board voted unanimously to ask him to resign.
He will be replaced on an acting basis by COO Yasuhiro Yamauchi. A replacement will be named by the end of October, the carmaker said in Yokohama on Monday.
Pressure on Saikawa intensified following reports last week that he and other Nissan executives were paid more than they were entitled to, dealing a final blow to the CEO who had spent the period since Ghosn’s arrest in November trying to right the carmaker.
Amid the fallout from losing a leader who loomed large over the Japanese company for two decades, Nissan has also been grappling with decade-low profit and job cuts as car sales slow globally.
“I should have clarified, ironed out everything and handed my baton over to a successor, but I couldn’t finish everything,” Saikawa said.
The Nissan lifer, 65, betrayed few emotions as he took questions after the board explained his departure. “I wanted to set things to right and resign.”
The board’s nomination committee will select the next CEO from a pool of about 10 candidates, said lead director Masakazu Toyoda.
They include non-Japanese, women and people from Renault SA, Nissan’s biggest shareholder and partner in a global carmaking alliance with Mitsubishi Motors.
Renault declined to comment on Saikawa’s resignation.
An internal investigation by Nissan found Saikawa had been overpaid by ¥90m ($841,000) via stock appreciation rights, including tax adjustments.
Under the plan, directors receive a bonus if the company’s share price performs better than a set target. Other executives were also said to have received excess pay.
Although Saikawa’s leadership has come under scrutiny since Ghosn’s arrest for financial crimes, he was reappointed as CEO by Nissan’s shareholders earlier in 2019. In June, Saikawa said that he should be held responsible for the instability unleashed by Ghosn’s downfall, and said he wanted the company to accelerate the search for his replacement.
The issue over excess pay first came to light after Greg Kelly, a former senior executive who was arrested along with Ghosn in November, accused Saikawa in a magazine interview of improperly receiving compensation.
Nissan does not consider the excess payment to have violated any laws, and Saikawa has denied he ordered the payments, saying the matter was mishandled by staff.
It is an ironic turn of events for Saikawa, who went from being Ghosn’s protege to the public face of the accusations against him.
Nissan’s CEO appeared before the world’s media just hours after the former chair’s November 19 arrest to denounce his behaviour, describing his “indignation” and “despair” at the conduct of his former boss.
Like Saikawa now, some of the allegations against Ghosn related to pay.
The former chair is on bail, due to face trial in Tokyo in 2020 on charges he failed to disclose compensation from Nissan, passed on trading losses to the carmaker and redirected company money into his own accounts. Ghosn denies all the allegations.
Since Ghosn’s arrest and removal as chair, Saikawa has led a companywide overhaul of Nissan’s corporate governance, bringing in more outside directors. He continued to lead negotiations on rebalancing the capital ties with Renault before his resignation.
I SHOULD HAVE CLARIFIED, IRONED OUT EVERYTHING AND HANDED OVER TO A SUCCESSOR, BUT I COULDN’T FINISH EVERYTHING