Nissan CEO Vows to Repay Funds Gained Through Stock ‘Scheme’
Nissan CEO Hiroto Saikawa finds himself in hot water after an internal investigation revealed the head of the embattled automaker violated company procedure by taking part in a stock scheme that paid out more than it should have.
Saikawa, like other executives linked to the scheme, apologized and vowed to repay the excess compensation, claiming he assumed the scheme — orchestrated by ousted and jailed former alliance boss Carlos Ghosn — was above board.
“I thought the procedures were handled properly and I didn’t know (about the misconduct),” Saikawa told reporters in Tokyo. Kyodo News reports the CEO admitted other execs also received overpayments, but denied he crafted the stock appreciation rights scheme.
“It was one of the schemes created under the leadership of Ghosn,” he said.
Saikawa’s apology came after Reuters, citing an internal source, reported on the issue following a Wednesday meeting of Nissan’s audit committee. The SAR scheme reportedly netted the CEO tens of millions of yen (the equivalent of hundreds of thousands of dollars). Under the scheme, executives at Nissan earned bonuses tied to the automaker’s stock price — a measure apparently crafted to boost company morale.
Nissan’s board will meet next week to determine if Saikawa and other execs truly broke protocol and are thus deserving of disciplinary measures. It’s never a good look for a company when the boss has to have his wrists slapped.
Since former chairman Ghosn’s November arrest on charges of underreporting his income and diverting company funds, Nissan has attempted to improve both its image and corporate governance practices. This, of course, has taken a backseat to the falling sales and cratering profits afflicting the automaker.