Nissan's Saikawa Reportedly Approved Ghosn's Retirement Deal; Coup Claims Emerge

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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8 of 11 comments
  • Inside Looking Out Inside Looking Out on Mar 28, 2019

    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.

    • See 4 previous
    • Sportyaccordy Sportyaccordy on Mar 29, 2019

      @SPPPP 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.

  • JimZ JimZ on Mar 28, 2019

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

    • Inside Looking Out Inside Looking Out on Mar 29, 2019

      Germany and Japan are the most peaceful nations in the world. They have no war machines and did not start and lost wars like US did many times. They all essentially are peaceniks and hippies.

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