New Nissan boss signals pay cuts and deeper restructuring
Makoto Uchida tells shareholders he will step down if he fails to turn round carmaker
Nissan’s chief executive has told shareholders he will step down if he fails to reverse the company’s dismal performance, as the lossmaking Japanese carmaker signalled cuts to executive pay and deeper restructuring measures in the US.
The pledge came as the newly appointed boss faced a two-and-a-half-hour grilling by shareholders venting their anger over a collapse in vehicle sales, dividends and Nissan’s share price in a turbulent year that followed the ousting of its former chairman Carlos Ghosn in late 2018.
“You can fire me immediately” if the management team is unable to steer the company in an effective manner and stem a hit to earnings, Makoto Uchida said at an extraordinary shareholders meeting in Yokohama on Tuesday.
“I’m taking over these tough circumstances with strong determination,” he added.
The EGM to appoint Mr Uchida and three other directors to Nissan’s board came days after the carmaker issued its second profit warning in three months following its biggest quarterly loss in a decade.
Shares have slumped more than 25 per cent this year after Nissan disclosed it would forgo the payment of its year-end dividend, which would also deal a blow to the worsening cash position at its alliance partner Renault.
Questions from angry shareholders centred on executive remuneration and retirement packages for departing directors including Hiroto Saikawa, who stepped down as chief executive last year following disclosures of overpaid compensation.
The retirement packages have been a source of fresh infighting after the newly formed compensation committee proposed granting full performance-based payouts for three former executives — excluding Mr Saikawa — despite a collapse in Nissan’s profits and share price, according to people close to company management.
On Tuesday, Mr Uchida signalled that cuts in executive pay would be included when he announces a broad range of new cost-cutting and other turnround measures in May.
“We will complete our cost cuts in North America and carry forward without setting any taboos,” Mr Uchida said, responding to a question on why the group’s fortunes in the US were not improving despite cutting back on car sales incentives there.
Keiko Ihara, the head of the compensation committee, added that the retirement packages for departing executives would take into account the current state of earnings.
With shareholder approval secured for the new management team, Mr Uchida’s focus will turn to fixing Nissan’s flagging performance and its alliance with Renault, which nearly broke down following Mr Ghosn’s arrest on financial misconduct charges — all of which the former chairman denies.
But shareholders expressed scepticism about the carmaker’s ability to outrun the internal turmoil, as it remains entangled in a legal dispute with Mr Ghosn after the former chairman jumped bail in Japan to escape to Lebanon.
“Nissan’s image and share price seem to decline every time the company is covered in the media related to Mr Ghosn. What is the management going to do about it?,” one shareholder asked.