By on March 28, 2019

The arrest of Carlos Ghosn, former head of the Renault-Nissan-Mitsubishi Alliance, seemed a rather straightforward back in November. By the time he was changing into his orange pajamas (or whatever color is most common in Japanese prisons), Nissan chief executive Hiroto Saikawa announced Ghosn had been dismissed from the company’s board. At the time, he claimed Ghosn and his top aide (Greg Kelly) underreported their compensation and misused corporate assets.

However, it wasn’t long until the narrative grew more complex. Following global accusations that Japanese courts could not be counted on for fair treatment, due to their ludicrously high 99-percent conviction rate, Ghosn began telling the press he believed he was on the receiving end of a corporate coup devised by Nissan. Slowly but surely, minor evidence supporting his claims trickled in.

On Wednesday, an external committee reviewing Nissan’s corporate governance suggested that enough facts exist to suspect Carlos of violating securities law and misusing company funds. However, the committee’s findings include a line indicating that Saikawa signed off on Ghosn’s retirement package. 

“Regarding the post retirement treatment of Mr. Ghosn, Mr. Ghosn, through Mr. Kelly as the person responsible for Global Human Resources and Legal, obtained documents signed by the current CEO,” Bloomberg quoted the committee as saying, noting that the panel did not elaborate on the contents of the retirement deal.

When asked whether there were any problems with the documents, Nissan declined to comment. However, Ghosn’s legal team continues to maintain that he acted with full authority of the board and its shareholders at all times, and was only interested in “achieving value for Nissan’s shareholders.”

One document, entitled “Employment agreement,” proposed a non-compete agreement for Ghosn’s retirement. Saikawa and Kelly were the officials who typically signed those type of agreements, an inside source explained.

From Bloomberg:

According to the document seen by Bloomberg, Ghosn was to receive a $40 million lump sum and an annual salary of $4.4 million with the title of adviser and chairman emeritus. He would also receive title to the three Nissan-owned homes, and a stake in Lebanese supplier Rymco, as well as use of offices including at Nissan’s Yokohama headquarters.

The Financial Times earlier reported that Saikawa approved an employment contract for Ghosn as chairman emeritus, citing a 2012 document that it said may not have been a final agreement.

Ghosn’s lawyers have said that the accusations against the executive are flawed because he never signed written agreements that he was to receive any deferred payments after retirement.

Without more information, it’s difficult to guess how damning Saikawa’s claimed approvals might be. But it is strange that the review committee neglected to provide additional information. Likewise, the CEO’s about-face on an earlier promise that he would soon retire has raised a few eyebrows. Even if he’s totally innocent, Saikawa will no doubt be subjected to additional scrutiny in the future.

None of this makes Ghosn appear innocent, however. A recent report in The Wall Street Journal claimed Nissan’s top brass was indeed plotting to put the defamed executive in jail in order to torpedo a European takeover, but stopped short of suggesting Ghosn committed no crimes. Even his lawyer, Junichiro Hironaka, has been careful not to call Ghosn guilt-free. Instead, he’s trying to build a case that Nissan’s plot to oust him severely tainted their criminal investigation.

“If a foreign company came in and took over a majority stake, it would be shocking,” said Carla Bailo, CEO of industry think tank The Center for Automotive Research and a former Nissan executive. “[Japan is] a very prideful nation.”

Unfortunately for Nissan, Renault has already brought up the possibility of a merger.

[Image: Nissan]

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11 Comments on “Nissan’s Saikawa Reportedly Approved Ghosn’s Retirement Deal; Coup Claims Emerge...”

  • avatar

    General take on one aspect of this: Ghosn was worth more to Nissan than Nissan could really pay him under traditional Japanese auto industry ‘guidelines,’ so there was always going to be pressure to get some additional compensation through other means.

    • 0 avatar

      So the crime that Ghosn is accused of is not reporting future income, and the only signature on the document proving this future income is from the guy who worked to get him arrested and took his job?

      • 0 avatar

        That’s the way I’m reading it. I’d say they have to prove Ghosn knew about it. Even then, I’d think you’d need Ghosns signature on something.

        William Macy isn’t being charged with anything in the College Entrance scam even though they’ve got recordings of him and his wife talking about it. Why? Nothing ties directly to him. But, this is the US and Ghosn is in Japan.

        I find it scary Ghosn is being charged with future crime were there’s no proof he signed off on it. I’m still having a hard time getting my head around fraud for something that hasn’t happened yet. I find it confusing on whether he’s received all, some or none.

  • avatar

    US authorities should put Dr.Z in jail before “merger of equals” finalized. America is a prideful nation.

    Another observation: greed of Western executives has no limits. For American CEO even $40 million retirement package and $4 mil a year pension would be not enough.

    • 0 avatar

      What’s an appropriate salary for a CEO who runs a company that generates billions of dollars in profit? Show your math.

      • 0 avatar

        If all you are saying is that it’s a hard question to answer, then that’s fair. If you are implying that CEO compensation should be directly proportional to the company’s profits, I think that is not very well supported.

        First of all, 99.99% or more of the work of the company is delegated to people other than the CEO. Second of all, big CEOs don’t really get punished when the company does badly. They get fired sometimes, but they always get some other cushy job. Their stock options can be reduced in value, but if the company rebounds after they leave, then they can actually make money! If the CEO makes bad decisions and the company loses money, it’s usually peons who lose their jobs. And that’s very bad when you are living hand to mouth.

        • 0 avatar

          don’t you get it? we’re supposed to lick the boots of the wealthy, because every single one of us in this country is just one bit of hard work (or a stroke of luck) away from being wealthy.

          • 0 avatar

            So, you think he was investigated by Nissan because he made too much money, or because he was taking the company in a less Japanese direction?

        • 0 avatar

          Yes, I am saying that just being angry at hearing a figure like $40M is not a very rigorous analysis of executive compensation.

          And you are right- 99.99% of the work is done by the rest of company…. which is why 99.98% of the compensation is doled out to the rest of the company. If the CEO role were no more difficult than that of a line worker they’d have similar pay.

          I’m not saying there aren’t issues with compensation in the US. Far from it. We are becoming a banana republic. But responding to these conditions by throwing a temper tantrum doesn’t do much good either.

  • avatar

    n.b. Japan is not a peaceful utopia, despite what a handful of obese American otaku believe while they’re fapping over hentai.

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