Nissan CEO Admits Executive Overpayment And Then Resigns

Even as the ousting of its former chairman Carlos Ghosn is still hurting Japanese car maker Nissan, the company’s CEO Hiroto Saikawa has resigned. Analysts say that this could affect the company’s efforts of a turnaround since the company business has been struggling in the wake of the global controversy surrounding the arrest and subsequent ouster of Ghosn last November.

Saikawa’s departure was announced by the board of directors of the company and would be effective from September 16. This announcement was made after a meeting of the board on Monday. While the board would search for a replacement, Chief Operating Officer Yasuhiro Yamauchi was named as the company’s acting CEO.

It was just a few days ago that Saikawa had accepted to reporters that he, along with some other top Nissan executives were overpaid in terms of the payment plan related to stocks of the company. While announcing that he would return the excess money ot the company, he denied any form of wrongdoing.

While making the announcement, the Nissan board also said that the company was hit by about 35 billion yen ($327 million) because of the alleged misconduct by former chairman Ghosn and Greg Kelly, a former Nissan director, after an internal investigation. No further details would be revealed by the company because of an ongoing court case in this regards, said Nissan Chairman Yasushi Kimura.

Just before the board meeting of the company on Monday, there were reports detailing the payments to Saikawa. A subject of the investigations initiated following the arrest of Ghosn was the stock appreciation rights program, or SAR, of the company, said Kimura while speaking to reporters at a press conference in Japan on Monday.

Kimura said that the program was “intentionally manipulated” so that the money that could be made out of it increases, even though he did confirm that there was no illegality in the payments made to Saikawa.

“As a governance issue, we take it seriously,” he added.

Kimura refused to confirm whether the resignation of Saikawa had any links to the excess payment that had been given to him. He instead added that there had been an intention for some time now of the CEO to “hand the baton” to a successor and the company also agreed with him.

While the payments made to Saikawa have been criticized, there was hardly any question about his leadership.

He decided to return money he said he “shouldn’t have received”, Saikawa reiterated while speaking to reporters Monday.

Nissan faced a crisis after the arrest and ouster of Ghosn as its alliance with the French auto major Renault and with the Japanese auto maker Mitsubishi, the largest alliance in the auto world in terms of  output and capacity, was facing trouble. There were also questions being asked about the reporting of executive pay of the company.

(Adapted from CNN.com)

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