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Nissan inquiry uncovers overpayments to several senior executives

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Nissan has found that multiple senior executives received excess payments as part of an incentive scheme as the Japanese carmaker prepares to conclude its massive, 10-month investigation into the finances and governance of the Carlos Ghosn era.

The overpayment issue appears to have extended to Nissan’s beleaguered chief executive, Hiroto Saikawa, who admitted to reporters gathered outside his home on Thursday morning that the operation of the incentive scheme was “different to what it should have been”.

People familiar with Nissan’s investigation said that, though the overpayments do not appear to have been illegal, Mr Ghosn, Mr Saikawa and others may have been overpaid by “several hundred thousands” of dollars each, under a system that offered senior executives a bonus based on the performance of Nissan’s share price. Mr Ghosn is the former chairman of Nissan.

Mr Saikawa, who said that the scheme was one of many “from the Ghosn era”, denies ordering any overpayments and has said internally that he plans to return any excess funds.

FILE - In this May 12, 2016, photo, then Nissan Motor Co. President and CEO Carlos Ghosn speaks during a press conference in Yokohama, near Tokyo. The wife of Carlos Ghosn is urging Emmanuel Macron to intercede on behalf of the former chairman of Nissan when the French leader meets with Japanese Prime Minister Shinzo Abe at the G-7 summit in France. (AP Photo/Eugene Hoshiko, File)
Carlos Ghosn: Years of activity at Nissan has come under scrutiny since his arrest. © AP

The revelations have come to light as Nissan enters the final stretch of the investigation that has involved hundreds of people across the company’s entire global network.

The results of the investigation are due to be presented to Nissan’s board next Monday.

“Findings from Nissan’s internal investigation are scheduled to be reported to the board of directors on September 9,” a Nissan spokesman said, commenting on Japanese media reports relating to the overpayments.

“We have heard that stock appreciation rights will also be part of this report,” he said, referring to a scheme that pays out cash according to the rise in share value over a specified period.

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The unprecedented depth of the investigation — coupled with the need to provide huge quantities of data to the Japanese prosecutors — has forced Nissan to bring in large teams of lawyers, accountants and forensic information technology experts to unravel years of activity that has come under scrutiny since the arrest of Mr Ghosn in November 2018.

Mr Ghosn was indicted by Japanese prosecutors on a series of allegations relating to his remuneration and payments made from the company. He has consistently denied all charges, and remains in Tokyo on bail as he prepares for a trial expected to begin in early 2020.

As an outcome of the arrest, Nissan has already conducted a probe into governance failures that were allowed to spiral during Mr Ghosn’s 18-year tenure at Nissan.

The results of that prompted Nissan to pledge major changes to its governance structures which have already included an overhaul of its independent board members.

Via Financial Times

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