Photo/IllutrationHiroto Saikawa, Nissan Motor Co. president and CEO, leaves the news conference room held at company headquarters on Sept. 9. (Hiroyuki Yamamoto)

  • Photo/Illustraion

Hiroto Saikawa, who touted improved corporate governance at Nissan Motor Co. after the arrest of former Chairman Carlos Ghosn, has been ousted as president and CEO over a corporate governance scandal.

Saikawa accepted the unanimous request from a Nissan board meeting on Sept. 9 that he step down from the top posts of the automaker. The resignation will take effect Sept. 16.

At a news conference later on Sept. 9, Yasushi Kimura, an independent outside director who chaired the board meeting, said the board had no choice but to seek Saikawa’s resignation, given the circumstances surrounding the CEO and Nissan.

“Corporate governance is at the core” of company management, Kimura said.

The board meeting was told about dubious remuneration to Saikawa and other current and former Nissan executives revolving around a performance-linked system known as stock appreciation rights (SAR).

Although the board found no wrongdoing on Saikawa’s part, many members said it would reflect badly on the automaker to have the top executive enmeshed in another remuneration scandal.

At his own news conference on Sept. 9, Saikawa indicated he had always intended on stepping down once the post-Ghosn course of Nissan was established. However, he said, “This timing is likely the earliest possible” date for resigning.

Nissan executives said Saikawa wanted to pass the baton to the next generation after resolving issues surrounding the relationship between Nissan and French automaker Renault SA.

The board’s request on Sept. 9 apparently caught Saikawa by surprise.

“Developments turned out in a way that not even Saikawa could have imagined in the morning,” a Nissan executive said.

Masakazu Toyoda, another independent outside director, joined Kimura at his news conference and said the board’s decision showed that moves to improve corporate governance were functioning properly.

Toyoda also chairs Nissan’s Nomination Committee, which will likely decide who will replace Saikawa as president and CEO by the end of October.

In the meantime, Yasuhiro Yamauchi, a representative executive officer and chief operating officer, will serve as acting president and CEO.

The in-house investigation report that was presented to the board detailed the dubious use of the SAR, which allows executives to receive a bonus if the company stock price exceeds a certain level over a specified period.

The report said that dates were changed for exercising the SAR, thereby inflating the remuneration received by Saikawa and other Nissan executives.

Saikawa received about 47 million yen ($438,000) more than he should have. He has indicated that he will return the inflated amount to the automaker.

The SAR-related remuneration was by no means the only factor that led to criticism of Saikawa’s corporate leadership after Ghosn was removed from all Nissan posts.

Having served for years as Ghosn’s right-hand man, Saikawa was viewed negatively by many both within and outside the company for failing to stop the questionable remuneration and money flow from Nissan to those with ties to Ghosn.

The former chairman has been indicted on aggravated breach of trust and other charges. Ghosn has denied all allegations against him.

Nissan has posted huge corporate losses following Ghosn’s arrest, and fingers have been pointing at Saikawa for the dismal performance.

For the April-June quarter in 2019, Nissan’s operating profit nose-dived by 98.5 percent over the same quarter of the previous year to 1.6 billion yen.