Nissan Motor CEO Hiroto Saikawa is stepping down after an internal investigation revealed falsified documents that boosted his compensation in 2013 by about $900,000 — further deepening a scandal that erupted with the arrest of former Chairman Carlos Ghosn last year.
"Hiroto Saikawa had indicated recently his willingness to resign," Nissan said in a press release Monday. "After discussion, the board asked him to resign as representative executive officer and CEO of the company, effective September 16, and he accepted."
Saikawa will be temporarily replaced by Chief Operating Officer Yasuhiro Yamauchi, the company said. Nissan expects to announce a successor for Saikawa by October. Ghosn, who awaits trail in Japan, has denied the charges against him.
Saikawa, who admitted to the overpayment last week, told a news conference in Tokyo that he wanted to solve the company's issues before stepping down, and he apologized for not being able to do so, according to Reuters. He also said he would return the improper compensation.
Saikawa's admission of overpayment, after the yearlong investigation, adds to a volatile period for Japan's second-largest automaker following Ghosn's initial arrest in November.
"This comes at a very difficult time," Autotrader senior analyst Michelle Krebs said Monday. "They've got a lot of work to do and without strong leadership that becomes even more challenging."
Saikawa was appointed CEO after a 40-year career at Nissan in April 2017, after serving as co-CEO with Ghosn from November 2016.
Nissan said its internal investigation, originally launched to look into Ghosn and board director Greg Kelly, said Saikawa's problem started when he complained about his pay in 2013.
While his pay wasn't adjusted, executives recalculated "the amount of compensation receivable from Saikawa's share appreciation rights that had already been exercised for a fixed amount, and falsified documents to give the appearance that the share appreciation rights in question had in fact been exercised one week after the actual exercise date," according to a five-page summary of the report released Monday.
The change boosted his compensation by about 96.5 million yen at the time, or roughly $900,000, based on current foreign exchange rates.
Overall, Nissan believes the Ghosn and Kelly concealed more than $327 million in payments to themselves and other executives — $187 million in nondisclosed compensation and $140 million in improper expenditures.
"This is a substantial amount, and Nissan fully intends to pursue all appropriate legal measures available, including seeking damages," the company said.
Nissan does not plan to punish or hold others who benefited from Kelly and Ghosn's alleged misconduct responsible for the overpayments. The company said there is "no reason to believe that any of the individuals were complicit in misconduct." Nissan is asking those who benefited from such overpayments to repay the overpaid amounts, "regardless of their lack of awareness of the misconduct."
The total, according to Nissan, includes $84.8 million in pay as well as an additional $21.2 million in "share appreciation rights" for Ghosn.
Nissan also said the report confirms Ghosn's alleged use of the company's assets for personal use, including: $27 million for properties in Beirut and Rio de Janeiro; $750,000 to Ghosn's sister as part of a "fictitious consulting contract"; and improper use of corporate jets and expenses for family members.
Saikawa's resignation "doesn't come as a surprise," according to Krebs. However, it renews questions about the future of the company and its global alliance with French automaker Renault and Japanese automaker Mitsubishi. Ghosn was the architect of the alliance and served as its chairman.
"The biggest questions are what does the company do from here? And what happens to the alliance?" she said. "If you look back, from the outside, it looked like the alliance was working well and then the Ghosn arrest happened and things that were going on inside became evident to the outside world."
Ghosn's arrest unearthed growing tension between Renault and Nissan over the structure of the partnership – specifically over voting rights. The French automaker is the largest shareholder of Nissan and has voting rights, Nissan is the second-largest shareholder in Renault, with no votes.
The alliance between Renault, Nissan and Mitsubishi has been built up over the last two decades and touted as one of the most successful in automotive history. Nissan and the French government each own 15% of Renault. In turn, the French auto firm holds a 43% stake in Nissan.