Business / Corporate

Nissan overpaid Carlos Ghosn whistleblower Hari Nada along with CEO Hiroto Saikawa

by Kae Inoue and Masatsugu Horie

Bloomberg

Nissan Motor Co. overpaid other executives in addition to its chief executive officer, according to people with knowledge of the matter, among them Senior Vice President Hari Nada, a key figure in the downfall of former Chairman Carlos Ghosn.

CEO Hiroto Saikawa told reporters on Thursday that he and several other Nissan executives received excess compensation. At least four other Nissan managers were also overpaid, the people said, asking not to be identified because the information isn’t public.

They include Nada, who cooperated with prosecutors in the investigation against Ghosn, and Executive Vice President Asako Hoshino, the people said.

Ghosn, who deepened Nissan’s alliance with Renault SA and drove the company’s strategy for decades, was arrested last November for alleged financial crimes and is awaiting trial in Tokyo. Nada used to be the head of Nissan’s CEO office, and struck a plea-bargain deal with prosecutors ahead of Ghosn’s arrest, according to the former chairman’s lawyer, Junichiro Hironaka.

Nada and Hoshino didn’t immediately respond to requests for comment. A representative for Nissan declined to comment on any additional executives who were overpaid.

Ghosn has denied the charges against him, which include that he underreported his own compensation from Nissan.

The revelations that executives received excess pay were part of an internal probe presented to the Nissan board’s oversight committee on Sept. 4, the people said. Saikawa was overpaid by about ¥47 million ($440,281), including tax adjustments, according to one of the people. Kyodo News reported that an internal investigation by the carmaker found Saikawa may have been overpaid via stock appreciation rights.

Saikawa’s comments Thursday saw Yokohama-based Nissan delay the pricing of a ¥250 billion bond issuance, a rare occurrence in the yen bond market. It’s just the latest headache for the carmaker, which is also grappling with a plunge in earnings and the ongoing fallout from Ghosn’s arrest.

Attention now turns to whether the board takes any action on the pay issue when directors meet on Monday.

“Findings from Nissan’s internal investigation are scheduled to be reported to the board of directors on Sept. 9,” said Nissan spokeswoman Azusa Momose. “We have heard that share appreciation rights will also be part of this report.”

The discrepancies in compensation first came to light after Greg Kelly, a former senior executive who was arrested along with Ghosn, accused Saikawa in a magazine interview of improperly receiving ¥47 million in pay. Both Ghosn and Kelly are out on bail.

Nissan started an internal probe into whether date restrictions on selling compensation-linked stock were altered in 2013, earning the CEO a higher profit, Bloomberg reported in June. Under Nissan’s plan, directors receive a bonus if the company’s share price performs better than a set target.

Nissan more than doubled planned job losses in July and unveiled fresh production cuts after reporting a 99 percent plunge in earnings, hurt by an aging product lineup and a slide in vehicle sales in the U.S. and Europe.

Although Saikawa’s leadership has come under scrutiny since Ghosn’s arrest, he was reappointed as CEO by Nissan’s shareholders earlier this year. In June, Saikawa said he should be held responsible for the turmoil at the Japanese automaker since Ghosn’s detention, and he wanted the company to accelerate the search for his replacement.