Nissan woes deepen as Ghosn successor asked to resign

Nissan woes deepen as Ghosn successor asked to resign
Hiroto Saikawa.

By Ma Jie and Tsuyoshi Inajima

Nissan chief executive Hiroto Saikawa will step down because of a scandal involving inflated stock-linked bonuses, thus deepening the turmoil that has enveloped the Japanese carmaker since the arrest of former chairman Carlos Ghosn.

Mr Saikawa, Mr Ghosn’s handpicked successor as CEO, will exit as of September 16, after Nissan’s board voted unanimously to ask him to resign. He will be replaced, on an acting basis, by chief operating officer Yasuhiro Yamauchi. A new CEO will be named by the end of October.

Pressure on Mr Saikawa intensified last week, following reports that he and other Nissan executives were paid more than they were entitled to. That dealt a final blow to the CEO, who had spent the period since Mr Ghosn’s arrest, in November, trying to right the carmaker.

Amid the fallout from losing a leader who loomed large for two decades, Nissan has also been grappling with decade-low profits and job cuts. Car sales are slow globally.

“I should have clarified, ironed out everything, and handed my baton over to a successor, but I couldn’t finish everything,” said Mr Saikawa. The Nissan lifer, now aged 65, betrayed few emotions as he sat alone, taking questions after the board had finished explaining 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 10 candidates, said lead director, Masakazu Toyoda. They include non-Japanese, women, and people from Renault, Nissan’s biggest shareholder and partner in a global auto-making alliance with Mitsubishi Motors.

An internal investigation found Saikawa had been overpaid by 90m yen (€760,000), 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 Mr Saikawa’s leadership had come under scrutiny since Mr Ghosn’s arrest for financial crimes, he was reappointed as CEO, by Nissan’s shareholders, this year. In June, Mr Saikawa said that he should be held responsible for the instability unleashed by Mr Ghosn’s downfall, and said he wanted the company to accelerate the search for his replacement.

The excess pay first came to light after Greg Kelly, a former senior executive, who was arrested with Mr Ghosn in November, accused Mr Saikawa, in a magazine interview, of improperly receiving compensation. Nissan doesn’t consider the excess payment to have violated any laws, and Mr Saikawa has denied he ordered the payments, saying the matter was mishandled by staff.

It is an ironic turn of events for Mr Saikawa, who went from being Mr Ghosn’s protege to the public face of the accusations against him. Nissan’s CEO had appeared before the world’s media just hours after the former chairman’s November 19 arrest to denounce his behaviour, describing his “indignation” and “despair” at the conduct of his former boss.

Mr Saikawa’s tenure as the CEO of one of Japan’s automaking icons was marked by missteps.

Just months after he took charge, in April 2017, Mr Saikawa was criticised for not having bowed enough when apologising for having used uncertified workers to sign off completed cars. Calls in the Japanese media for him to resign were amplified after he failed to show up at a press conference to address the falsification of emissions data.

The deterioration in relations between Nissan and Renault, since Mr Ghosn’s arrest and an aborted merger with Fiat-Chrysler, also added to pressure on Mr Saikawa. Long-held tensions between the two carmakers, over control of their alliance, broke into the open after Mr Ghosn was arrested, and worsened when Renault’s new chairman, Jean-Dominique Senard, pursued the Fiat deal without telling the Japanese company.

Bloomberg

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