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Nissan chief Hiroto Saikawa to step down after pay row

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Nissan’s board has decided to remove Hiroto Saikawa as chief executive following a collapse in profits, loss of investor confidence and revelations that he had been improperly overpaid.

People close to both the Japanese carmaker and Renault said Mr Saikawa was effectively pushed out on Monday as pressure built to bring in a new chief executive to implement a turnround plan and restore relations with its French partner, which soured in the wake of the ousting of its former chairman Carlos Ghosn.

Nissan said Mr Saikawa would step down next week. Yasuhiro Yamauchi, chief operating officer, would take over as interim chief executive until Nissan finds a permanent replacement for Mr Saikawa by the end of October.

Shares in Nissan rose as much as 4 per cent in early trading on Tuesday, versus a 0.5 per cent gain for Japan’s benchmark Topix index.

Its nomination committee has created a shortlist of more than 10 candidates, including current executives, officials from Renault, women and non-Japanese candidates, according to Masakazu Toyoda, who leads the committee.

People familiar with the discussions said headhunting firm Spencer Stuart was hired for the chief executive search, and that its shortlist includes Makoto Uchida, the head of its Chinese business, and Jun Seki, its performance boss.

“Mr Saikawa had recently expressed his intention to resign,” Yasushi Kimura, Nissan’s chairman of the board, said at a news conference late on Monday following a board meeting. “Considering the various issues surrounding Mr Saikawa . . . we felt it was appropriate to replace the top at this timing.”

The leadership change comes after the company concluded a 10-month internal investigation into the finances of Mr Ghosn. Nissan said it would seek damages for alleged misconduct by the former chairman and his aide Greg Kelly, which it estimated caused financial damages of ¥35bn ($327m) to the company.

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Mr Ghosn, who was arrested and ousted last November, has denied allegations that he understated his pay in financial documents and other charges related to breach of trust. Mr Kelly has also maintained his innocence. 

In a statement on Monday, Mr Ghosn’s global defence counsel in the US said Mr Ghosn “will continue ‎to vigorously fight Nissan’s baseless claims and expose their orchestrated coup,” criticising the company’s position as “inconsistent, contradictory and incoherent”.

Nissan’s own investigation has also found that several of its senior executives, including Mr Saikawa, received excess payments as part of an incentive scheme that paid out cash depending on Nissan’s share price performance. 

Although the excess payments were not illegal, the investigation results created fresh doubts about Mr Saikawa, who has been criticised for his handling of Mr Ghosn’s ousting and his failure to prevent the alleged misconduct. 

“For a lot of us in the global network, this gives a tiny bit of certainty to a situation that has not felt secure since the arrest,” said one Nissan executive. “Nobody internally felt he [Mr Saikawa] could stay at all, and after the way Carlos ran the company, it only functions with strong leadership. Now we just have to hope that the next person gives us that.” 

On Monday, Mr Saikawa, who admitted his resignation came “slightly early”, sought to draw a distinction between the recent findings of excess payments and Mr Ghosn’s alleged financial misconduct. “This is clearly different from a deliberate act of misconduct,” he said at a news conference. “I’ve always had the intention to resign but there were different views on when the right timing should be.”

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Removing Mr Saikawa from his position also clears one of the big barriers to closer co-operation between Nissan and Renault; relations between him and Thierry Bolloré, Renault’s chief executive, have soured.

A change at the top of Nissan may also potentially open the door to further talks between Renault and Fiat Chrysler about a future combination, months after the pair called off negotiations over a €33bn merger. 

Additional reporting by Peter Campbell in Frankfurt

Via Financial Times

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