Nissan chief Hiroto Saikawa admitted that the operation of the incentive scheme was ‘different to what it should have been’
Nissan chief Hiroto Saikawa admitted that the operation of the incentive scheme was ‘different to what it should have been’ © AP

Nissan has found that multiple senior executives received excess payments as part of an incentive scheme as the Japanese carmaker prepares to conclude its huge, 10-month investigation into the finances and governance of the Carlos Ghosn era.

The overpayment issue appears to have extended to Hiroto Saikawa, Nissan’s chief executive, who admitted to reporters gathered outside his home on Thursday that the operation of the incentive scheme was “different to what it should have been”.

The excess payments add to a picture of slack governance standards that analysts had long suspected were a problem at the company. Nissan has attempted to demonstrate they were an effect of allowing too much power to accumulate in the hands of Mr Ghosn. The results of the investigation into the company’s governance under its former chairman are due to be presented to Nissan’s board on Monday.

Mr Ghosn, Mr Saikawa and others may have been overpaid by “several hundred thousands” of dollars each under a system that offered senior executives a bonus based on the performance of Nissan’s share price, according to people familiar with the Nissan investigation. The overpayments did not appear to have been illegal, they added.

Mr Saikawa denies ordering any overpayments and has said that he plans to return any excess funds, according to a person familiar with the company.

The revelations have come to light as Nissan enters the final stretch of an investigation that has involved hundreds of people across the company’s global network.

“Findings from Nissan’s internal investigation are scheduled to be reported to the board of directors on September 9,” Nissan said, commenting on Japanese media reports relating to the overpayments.

“We have heard that stock appreciation rights will also be part of this report,” the company added, referring to a scheme that paid out cash according to the rise in share value over a specified period.

The depth of the investigation, coupled with the need to provide huge quantities of data to Japanese prosecutors, has forced Nissan to hire large teams of lawyers, accountants and forensic IT experts to unravel years of activity that have come under scrutiny since the arrest of Mr Ghosn in November 2018.

Mr Ghosn was indicted by Japanese prosecutors on a series of allegations relating to his remuneration and payments made from the company. He has consistently denied all charges, and remains in Tokyo on bail as he prepares for a trial expected to begin in early 2020.

As an outcome of the arrest, Nissan has already conducted a probe into governance failures that were allowed to spiral during Mr Ghosn’s 18-year tenure at the carmaker.

The results of that investigation prompted Nissan to pledge major changes to its governance. These have already included an overhaul of its independent board members.

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