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Nissan CEO Saikawa to step down over compensation scandal

Xinhua | Updated: 2019-09-09 17:49
Nissan CEO Hiroto Saikawa attends a news conference to release first quarter earnings at the company headquarters in Yokohama, Japan July 25, 2019. [Photo/Agencies]

TOKYO - Nissan Motor Co. President and CEO Hiroto Saikawa will resign from his post on Sept 16, the chairman of the automaker's board Yasushi Kimura told a press conference Monday.

The announcement from Kimura follows the board convening regarding Saikawa and other executives at Nissan being overcompensated by a scheme connected to stock appreciation rights.

Earlier on Monday, Saikawa himself indicated that he planned to step down from his post after admitting he was hugely overpaid by the scheme used to incentivize executives at the embattled automaker.

"I will do what I must do while still at the helm at Nissan and hand over the job as early as possible," Saikawa told a press briefing on the matter, with his remarks coming on the heels of his admission of being massively overpaid just days earlier.

The latest revelation of financial indiscretions at Nissan come as the Yokohama-headquartered Japanese automaker is already struggling to deal with slumping earnings and the high-profile arrest of its former chairman, Carlos Ghosn, in November last year, on allegations of a string of financial improprieties.

According to sources close to the matter, Saikawa expressed his intention to resign over the matter to some Nissan executives on Sunday, although he did not mention an exact timeframe for his departure or who might take over from him.

A probe by Nissan, sources have said, revealed that Saikawa, who became CEO in April 2017 and was once a member of Ghosn's inner circle, had received tens of millions of yen more through stock appreciation rights than he was entitled to.

Nissan's stock appreciation rights scheme allows directors to receive a bonus if the company's share price performs well. It was purportedly introduced to raise morale among executives.

In a press briefing on Thursday Saikawa said that "the operation of the remuneration scheme was different to how it should have been," with regards to him being grossly overpaid.

The under-fire CEO, however, has denied ordering the shady payments, and was quoted as saying, "I thought the procedures were handled properly and I didn't know about the misconduct."

Saikawa said he will reimburse Nissan for the excessive amount of potentially illicit funds he received.

At the board meeting on Monday, it was also discussed whether Nissan needs to impose disciplinary measures on Saikawa and other executives, sources close to the matter said.

Nissan's shareholders have called for Saikawa to resign to take account for not reining in Ghosn and allowing him the autonomy to allegedly fleece Nissan in multiple cases of financial misconduct.

Ghosn is facing trial for allegedly under-reporting his remuneration by around 9 billion yen ($84 million) over eight years through March 2018 and for diverting company funds to himself.

The once-feted auto tycoon, who led Nissan from near bankruptcy, created one of the world's largest automaker alliances along with Renault SA and Mitsubishi Motors Corp., in the two-decades he served at the firm.

Ghosn has denied all charges against him, saying that executives at Nissan had conspired against him.

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