SOUTHFIELD, MICHIGAN – A former senior board member of Nissan Motor Co. said the company’s current chief executive officer sought an exception on the sale of compensation-linked stock, which resulted in him earning a higher profit, according to a Japanese media report.
Greg Kelly, who was arrested the same day as former Chairman Carlos Ghosn in November, told monthly magazine Bungei Shunju about the request alleged to have been granted to Hiroto Saikawa in 2013. Saikawa was executive vice president with Nissan at the time, and became CEO about four years later.
Saikawa sought the exception to help pay for the purchase of a new home, which Kelly alleges the executive had initially asked Nissan to buy for him, the report said. The magazine quoted Kelly as saying Saikawa reaped an estimated additional gain of ¥47 million ($430,000) when the stock award’s execution date was changed to May 22 instead of May 14, a period during which Nissan’s stock appreciated about 10 percent. The magazine quoted the former executive as saying the exception represented a “special case.”
Saikawa denied using company funds to buy his house. “I bought it with my own money,” he told reporters on Monday.
Kelly was removed as a representative director of Nissan in April and charged by authorities in Japan with underreporting executive compensation. Kelly’s attorney in the U.S. wasn’t available for comment. A representative for Nissan’s U.S. subsidiary declined to comment. Kelly and Ghosn, who are both free on bail after having been jailed for weeks after their arrest in Japan, have denied wrongdoing and are contesting the charges against them.
The report raises questions about Saikawa’s knowledge of remuneration practices at the automaker. Saikawa was found by an outside corporate governance panel appointed by Nissan to have signed off on Ghosn’s retirement package, but the CEO hasn’t been charged with any crimes or accused of any wrongdoing. Prosecutors in Japan have said Ghosn’s compensation was underreported, although it’s unclear how much if any of that was deferred for retirement.
The allegations come at an awkward time for Nissan and Saikawa as its two-decade old alliance with French automaker Renault SA may be in peril. Saikawa himself is under intense pressure to turn around the Japanese automaker’s profit slide, and devise a long-term strategy for Nissan following the ouster of his former mentor Ghosn.
According to the magazine report, Kelly said Saikawa was fully aware of Ghosn’s compensation — including a proposal to provide the then-chairman with a consulting fee if he should retire from Nissan or accept a less prominent role in company.