Nissan Board Set to Meet as It Faces a Leadership Crisis

Nissan’s board of directors is set to meet on Monday as the company’s top executive, Hiroto Saikawa, faces a widening crisis of confidence in his leadership.

The board is expected to hear the results of a 10-month investigation into the company that was prompted by the arrest last November of Carlos Ghosn, its former chairman, who has since been charged with underreporting his compensation as well as other financial impropriety, allegations that he denies.

Mr. Ghosn’s fall left the company in chaos. In the months since, its profits have dropped precipitously, its alliance with the French automaker Renault has frayed, and its leader, Mr. Saikawa, has been engulfed in scandal.

Since Mr. Ghosn’s arrest, Nissan’s internal investigation has grown to encompass many other aspects of the company’s affairs, including the compensation of Mr. Saikawa and other top executives.

Pressure on Mr. Saikawa to resign has increased sharply since Thursday, when he announced that he and other top executives had received higher compensation than they were entitled to as part of a stock-linked payment plan run by the company.

Mr. Saikawa denied any prior knowledge of the matter, saying that the overpayments were the result of a company error, and that he and other executives would return the full sum.

The Japanese economic daily Nikkei Shimbun reported late Sunday that Mr. Saikawa had since expressed his intention to resign, citing the questions surrounding his compensation and the company’s overall performance. The article did not attribute a source for the information or say when Mr. Saikawa intended to make any announcement.

At the meeting set for Monday, Nissan’s board is expected to discuss the compensation issue, in addition to hearing a fuller accounting of the monthslong investigation into the company’s governance, a spokeswoman said.

The board will be hard-pressed to avoid discussing what’s next for Mr. Saikawa, who has faced growing skepticism for months.

Mr. Saikawa, who replaced Mr. Ghosn as Nissan’s chief executive in April 2017, survived a first push for his resignation after Mr. Ghosn’s arrest, saying he needed time to put the company back on track.

But in June, Greg Kelly, a former senior Nissan executive who was a top aide to Mr. Ghosn, accused Mr. Saikawa of receiving improper compensation himself. Mr. Kelly said in an interview that Mr. Saikawa had manipulated his stock-based compensation to increase his total payment. Mr. Kelly has been charged with conspiring to help Mr. Ghosn underreport his pay, but he denies the allegations.

Mr. Kelly’s accusations tarnished Mr. Saikawa’s credibility. Around the same time, two proxy advisory firms began a campaign to oust him from Nissan’s board over concerns about the company’s performance and his relationship with Mr. Ghosn.

He was reappointed with 78 percent of the vote, a relatively weak showing.

At the same time as the leadership problems, weakening demand for cars in Europe and North America, the company’s largest market, is crimping Nissan’s earnings. The company’s profit was 94 percent lower in April through June than it was at the same time last year. Nissan has said that it expects net profit to drop by almost 47 percent by the end of the current fiscal year in March.

Adding to the problems, Mr. Saikawa earned the ire of his French partners at Renault in June, when he frustrated the company’s efforts to merge with Fiat Chrysler, a deal that would have created the world’s largest automaker. Renault holds around a 43 percent stake in Nissan, giving it outsize influence on the Japanese company’s affairs. Nissan, however, holds only 15 percent of its partner, an issue that has long been a sore point for Mr. Saikawa and has weakened his hand in negotiations with the company.

Nevertheless, Renualt has continued to support Mr. Saikawa, even if through gritted teeth.

But that could change: Mr. Saikawa’s replacement will be chosen by a newly formed nomination committee, introduced as part of an overhaul of Nissan’s corporate governance approved at the company’s annual meeting in June. The group includes Renault’s chairman, Jean-Dominique Senard.

At a news conference in late July, Mr. Saikawa said that the committee had already begun its search for a new leader, and that he expected the process would take no longer than a year.

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