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Former Ghosn Aide Says Nissan CEO Saikawa Got 2013 Pay...

Business Maverick

Business Maverick

Former Ghosn Aide Says Nissan CEO Saikawa Got 2013 Pay Deal

Hiroto Saikawa Photographer: Kiyoshi Ota/Bloomberg
By Bloomberg
11 Jun 2019 0

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 on the same day as former Chairman Carlos Ghosn in November, told monthly magazine Bungei Shunju about the alleged request granted to Hiroto Saikawa in 2013. Saikawa was a Nissan executive vice president 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 initially had asked Nissan to buy for him, the report said. The magazine quoted Kelly as saying Saikawa reaped an estimated additional gain of 47 million yen ($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%. 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 under-reporting 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 Japanese 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. Japanese prosecutors have said Ghosn’s compensation was under-reported, 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 turnaround the Japanese automaker’s profit slide and devise a long-term strategy for Nissan following the ouster of his former mentor Ghosn.

Kelly said in the Japanese magazine article that 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.

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