Nissan Chief Hiroto Saikawa Confirms He Was Improperly Overpaid

ImageHiroto Saikawa, Nissan’s chief executive, denied any prior knowledge of the improper overcompensation.
Hiroto Saikawa, Nissan’s chief executive, denied any prior knowledge of the improper overcompensation.CreditCreditKimimasa Mayama/EPA, via Shutterstock

The embattled chief executive of Nissan, Hiroto Saikawa, said on Thursday that he had received higher compensation than he was entitled to, but denied any prior knowledge of the matter.

Speaking to local news media, Mr. Saikawa acknowledged that an internal Nissan investigation had discovered that he and other executives had received stock-linked compensation beyond the amount to which they were entitled. Mr. Saikawa received about $440,000 in excess compensation, according to NHK, the official Japanese broadcaster, which he blamed on a company error.

“I apologize for any concerns caused by this,” he said, according to NHK, “and I believe that the amount that is different from the original registration should be returned to the company. That is my intention.”

The acknowledgment is likely to draw comparisons to the furor over the compensation paid to Carlos Ghosn, Nissan’s former top boss and the onetime leader of the vast carmaking alliance between Nissan, Renault of France and Mitsubishi Motors of Japan. Japanese prosecutors have charged Mr. Ghosn with underreporting his own compensation, an accusation he has denied.

The results of the investigation are expected to be presented to Nissan’s board set for Monday, said Azusa Momose, a Nissan spokeswoman. She declined to comment further.

Mr. Saikawa’s disclosure casts a further cloud over an automaker rocked by scandal and broader industry problems. Its profits have nearly evaporated and sales are slumping. It is in the process of laying off 12,500 employees globally, and has found itself at odds with its alliance partner, the French automaker Renault.

Nissan has attributed its myriad problems to Mr. Ghosn, saying that both its financial and governance issues resulted from an overconcentration of power in his hands.

The pending trial of Mr. Ghosn and his former lieutenant, Greg Kelly, have put Nissan under an unfavorable light. Mr. Kelly was taken into custody in Japan in November at the same time as Mr. Ghosn on suspicion of conspiring to underreport Mr. Ghosn’s compensation. Mr. Kelly has denied the charges, and both former executives are out on bail.

Mr. Kelly drew attention to possible issues with Mr. Saikawa’s compensation in a long interview published last June in the Japanese magazine Bungei Shunju, a journal of literature and politics.

In the interview, Mr. Kelly said that Mr. Saikawa had signed off on Mr. Ghosn’s compensation and had asked Nissan for financial help to purchase a second home in Tokyo. In one instance, Mr. Kelly said, Mr. Saikawa had increased his earnings by improperly changing the execution date of stock-based compensation.

Neither Mr. Saikawa nor Nissan have responded directly to the accusations.

However, an independent report into the problems at the company under Mr. Ghosn acknowledged Mr. Saikawa had signed documents related to the former leader’s compensation.

The company’s profit fell 94 percent in the period from April to June compared with the same time last year. The company had previously warned that its net profit would hit “rock bottom” in 2019, dropping almost 47 percent by the end of the fiscal year in March. The announcement followed a nearly 45 percent fall in profit last year.

The drop is driven by slowing global demand for automobiles, particularly in Europe and North America, Nissan’s largest market. But Nissan’s problems have been compounded by a stagnant product lineup and difficulty attracting American consumers who favor trucks and sport utility vehicles.

The problems are a legacy of Mr. Ghosn’s time at the head of the company, Mr. Saikawa has said. But his own leadership has also come under scrutiny. In recent months, shareholders, the press and former colleagues have begun to question Mr. Saikawa’s record and ability to guide the company through its current problems.

Mr. Saikawa was re-elected to Nissan’s board of directors in June with around 78 percent of the vote and over the objections of two proxy advisory firms. Both companies had issued calls for shareholders to reject Mr. Saikawa’s appointment, citing concerns about Nissan’s performance and questions about his involvement in Mr. Ghosn’s alleged wrongdoing.

During a news conference in July, Mr. Saikawa hinted that he could step down within the year, noting that he had asked a newly established nomination committee had begun looking for his replacement.