Ex-Nissan executive points to CEO’s role in Ghosn’s pay decision
Chief was intimately involved in drawing up package, says Greg Kelly
One of the most powerful former executives at Nissan has questioned why Japanese prosecutors spared the current chief executive, Hiroto Saikawa, when they arrested former chairman Carlos Ghosn last November and plunged the Japanese carmaker into chaos.
In his first media interview with a Japanese magazine since his own arrest in Tokyo late last year, Greg Kelly, a former Nissan board member who worked closely with Mr Ghosn, said that Mr Saikawa had not only been intimately involved in the former chairman’s post-retirement remuneration package, but had himself attempted to benefit personally from company funds.
Mr Ghosn is on bail awaiting trial on four separate indictments of financial misconduct including two for understating his pay in Nissan’s financial statements by not including more than $80m in deferred remuneration that he was set to receive over an eight-year period. He has denied all charges.
Mr Kelly, who claimed he was never the deposed chairman’s “right-hand man”, used his three-hour interview with Bungei Shunju to deny charges that he conspired with Mr Ghosn to falsify the former chairman’s pay.
“We didn’t violate the law [and] we were trying to protect Nissan in a way that was lawful which was to retain a talented top executive,” Mr Kelly told the monthly magazine.
“I didn’t think [Mr Saikawa] should be [in the detention centre] but the question was why am I not in the same place as he was. Because essentially we had the same objective, which was to retain Carlos Ghosn in a way that was lawful,” he added.
According to Mr Kelly, Mr Saikawa was directly involved from the outset in compiling a proposed retirement package for Mr Ghosn that included a $40m lump sum payment to ensure that the former boss would not be poached by a rival after he stepped down.
The document is the same 10-year employment contract for Mr Ghosn for his post-retirement role as “chairman emeritus”, which the Financial Times reported in March as being signed by Mr Saikawa himself.
The Nissan chief reportedly told prosecutors that he signed the document regarding Mr Ghosn’s deferred payment “without thinking too deeply.”
But Mr Kelly said he and Mr Saikawa held discussions to set up the retirement package in the summer of 2011, and had approved the document twice after checking it carefully. The existence of the document was also known by the then head of the chief executive’s office and by external lawyers hired by Nissan.
Nissan has been charged for the same offence of falsifying Mr Ghosn’s pay, but the company has maintained that Mr Saikawa was not aware of the misstated pay. The Nissan chief executive, who has described Mr Ghosn and Mr Kelly as the “masterminds” of the alleged misconduct, has not been indicted.
“I’ve known Mr Saikawa for many years. He always seemed to be a guy that supported Carlos Ghosn,” Mr Kelly said, questioning why Nissan had not handled the matter internally. “The abrupt arrests in this case is unusual and abnormal”
In the interview, Mr Kelly also revealed that Mr Saikawa had consulted him on whether company money could be used to purchase his new house in Tokyo in the spring of 2013.
Mr Saikawa, who claimed he was short of cash, proposed that he would repay the loans Nissan shouldered on a monthly basis, but the company ultimately did not help buy the chief executive’s house.
According to Mr Kelly, Mr Saikawa eventually purchased his new home by profits he made from moving back the execution date of his stock appreciation rights, which was originally set as May 14 2013, by one week during which Nissan shares rose 10 per cent. As a result, Mr Saikawa is estimated to have reaped additional gains of ¥47m ($434,000).
“He cared so much about his own compensation,” Mr Kelly said of Mr Saikawa, recalling that the Nissan boss resented not being part of the package for foreign executives which was set higher than the pay for Japanese executives.
Nissan declined to comment on Mr Kelly’s comments and declined to make Mr Saikawa available for an interview.