Scandal at Nissan deepens as CEO Saikawa resigns after admitting he was improperly overpaid

GP: Nissan Motor CEO Hiroto Saikwa
Hiroto Saikawa, president and chief executive officer of Nissan Motor Co., speaks to a member
of the media in Tokyo, Japan, on Wednesday, June 12, 2019.
Noriko Hayashi | Bloomberg | Getty Images

Nissan Motor CEO Hiroto Saikawa  is stepping down after an internal investigation revealed falsified documents that boosted his compensation in 2013 by about $900,000 — further deepening a scandal that erupted with the arrest of former Chairman Carlos Ghosn last year.

“Hiroto Saikawa had indicated recently his willingness to resign,” Nissan said in a release Monday. “After discussion, the Board asked him to resign as representative executive officer and CEO of the company, effective September 16, and he accepted.”

Saikawa will be temporarily replaced by Chief Operating Officer Yasuhiro Yamauchi, the company said. Nissan expects to announce a successor for Saikawa by October.

Saikawa, who admitted to the overpayment last week, told a news conference in Tokyo that he wanted to solve the company’s issues before stepping down, and he apologized for not being able to do so, according to Reuters. He also said he would return the improper compensation. Saikawa’s admission of overpayment, following the yearlong investigation, has pitched Nissan into fresh crisis and appears to have accelerated the search for a permanent replacement.

Nissan said its internal investigation, originally launched to look into Ghosn and board director Greg Kelly, said Saikawa’s problem started when he complained about his pay in 2013. 

While his pay wasn’t adjusted, executives recalculated “the amount of compensation receivable from Saikawa’s share appreciation rights that had already been exercised for a fixed amount, and falsified documents to give the appearance that the share appreciation rights in question had in fact been exercised one week after the actual exercise date,” according to a five-page summary of the report released Monday. 

The change boosted his compensation by about 96.5 yen at the time, or roughly $900,000, based on current foreign exchange rates.

Saikawa, who started at Nissan in 1977, was appointed CEO in April 2017, following serving as co-CEO with Ghosn from November 2016. 

The report accuses Ghosn and Kelly of concealing $84.8 million in Ghosn’s compensation and an additional $21.2 million in “share appreciation rights” for Ghosn.

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