Nissan Motor’s global CEO, Hiroto Saikawa, has resigned after an internal inquiry revealed that he was overpaid a compensation of $440000 in 2013 under a scheme where directors were entitled to bonus if the company’s share price went above a certain limit in specific period of time.
Saikawa claimed in a press statement that he was innocent and was unaware of any impropriety and blamed the system developed at Nissan by former Chairman, Carlos Ghosn, for the dubious funds he received. “I thought the procedures were handled properly and I didn’t know about the misconduct.”, Saikawa was quoted as saying.
According to the reports by the internal committee, Saikawa asked former Board Member Greg Kelly to increase the amount of his executive compensation. Kelly then ” recalculated the amount of compensation receivable from Saikawa’s share appreciation rights that had already been exercised for a fixed amount, and falsified documents to give the appearance that the share appreciation rights in question had in fact been exercised one week after the actual exercise date”, the five-page summary report declared.
The resignation of Mr. Saikawa deepens the trouble the automobile company has been in recently. Last year its Chairman, Carlos Ghosn, was arrested on charges of corruption and undereporting of income. Ghosn is now out on bail and in Japan. He denied any wrongdoings and blamed some top executives of the company for framing him as they were opposed to his plans of further integrating the company’s alliance with Renault. Renault right now holds 43% stake in Nissan.
The Ghosn scandal proved dangerous for the company, as its net profit dropped by nearly 95% in April- June quarter and it was announced in July that Nissan would slash more than 12000 jobs worldwide. And now this recent scandal with the CEO is just going to increase the troubles for already rock bottom Nissan. Ghosn had himself picked Saikawa as his successor but after he got embroiled in the controversy, Saiwaka distanced himself from the disgraced ex Chairman. In a press conference on the day of Ghosn’s arrest, Saikawa talked about ” the negative aspects of the Mr Ghosn’s regime”.
The resignation of Mr. Saikawa came only days after he accepted being overpaid to reporters. He announced that he would refund any excess funds taken by him. And even though the payment made to Saiwaka was not illegal, the Share appreciation rights program under which he received such large amount of money was manipulated intentionally to favor him and other few directors. The scheme originally launched to raise the morals of the executives has since been scrapped, Nissan Board announced in its latest statement.
Nissan’s current Chief Operating Officer, Yasuhiro Yamauchi, will take over the position of interim CEO of the company. The company aims to find a permanent replacement by the end of this month. Nissan Board announced that they are considering 10 candidates as Saikawa’s replacement. And even though these candidates haven’t been identified, the Board cleared that non-Japanese weren’t on the list.