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Embattled Nissan C.E.O. Hiroto Saikawa to Resign, Carmaker Says Nissan Takes Another Hit as C.E.O. Hiroto Saikawa Leaves
(about 5 hours later)
YOKOHAMA, Japan — The embattled chief executive of Nissan, Hiroto Saikawa, will resign, the company said Monday, following months of speculation about his ability to manage the Japanese carmaker since it was rocked by the arrest last year of its former chairman, Carlos Ghosn. YOKOHAMA, Japan — In less than a year Nissan has lost its chairman to a financial misconduct scandal; its profits have plummeted; and its ties to Renault, often seen as crucial for its future, have fallen apart. And now, its embattled chief executive is leaving in the shadow of a pay scandal.
Mr. Saikawa’s resignation takes effect Sept. 16, and the company is considering a list of 10 candidates for his successor, said Masakazu Toyoda, who leads the company’s nomination committee. A decision is expected by the end of October. The departure of the executive, Hiroto Saikawa, follows months of speculation about his ability to manage the Japanese carmaker since it was rocked by the arrest last year of its former chairman, Carlos Ghosn.
Nissan’s chief operating officer, Yasuhiro Yamauchi, will serve as interim C.E.O., Mr. Toyoda said. The resignation was announced less than a week after Mr. Saikawa said he had received payments from Nissan well beyond his earnings — an admission that echoed the charges that led to Mr. Ghosn’s fall.
Mr. Saikawa “had indicated recently his willingness to resign,” the company said in a statement. “As the auto industry is facing a big transformation, the question is who should be running the company?” said Nissan’s chairman, Yasushi Kimura, speaking at a hastily arranged news conference at Nissan’s headquarters in Yokohama. “Replacing the top executive of the company will enable it to be a leader in the auto industry.”
Following the company’s news conference, Mr. Saikawa stepped forward and faced the room full of reporters alone. He apologized for leaving the company before he could fulfill his promise of putting the company back on track. After the news conference, once the board members had left, Mr. Saikawa stepped into the room and faced the crowd of reporters alone. He apologized for leaving the company before he could fulfill his promise of putting it back on track.
News of his departure came after Nissan’s board received a briefing on the results of a nearly year-long investigation into the company’s governance. The inquiry was a prompted after Japanese prosecutors charged Mr. Ghosn with financial misconduct, including underreporting his compensation by tens of millions of dollars. He denies any wrongdoing. During his tenure, Mr. Saikawa said, problems had plagued the company. “We are seeing a lot of repercussions for what we have done in the past,” he said. “I should have clarified and ironed everything out.”
Nissan also faces charges in relation to Mr. Ghosn’s compensation and it has attempted internal governance reforms. The comments seemed more defiant than contrite, and expressed some bitterness over his predicament. Over more than 30 minutes, he repeatedly listed his accomplishments at the company, including setting up a new corporate governance system. His largest regret, it seemed, was not continuing on in the position.
In the months since Mr. Ghosn’s arrest in November, Nissan’s internal inquiry had grown to include many other aspects of the company’s business, including the compensation of Mr. Saikawa and other top executives. The departure takes effect Sept. 16. Nissan is considering a list of 10 candidates for his successor, Masakazu Toyoda, who leads the company’s nomination committee, told reporters. A decision is expected by the end of October.
Speculation that Mr. Saikawa — a once-loyal deputy to Mr. Ghosn who has been withering in his criticism since the arrest — would resign had grown since Thursday, when he announced that he and other executives had received unearned compensation as a result of what he described as an error by the company. Nissan’s chief operating officer, Yasuhiro Yamauchi, will serve as interim chief executive, Mr. Toyoda said.
The admission was blow to Mr. Saikawa. Nissan, a partner in a global carmaking alliance with Renault and Mitsubishi, has suffered with dismal performance and a crisis of confidence over the past year, and Mr. Saikawa has been struggling to put the company back on track. Mr. Kimura said that when Mr. Saikawa asked the company’s board to find his successor as soon as possible, the directors agreed unanimously that “it was better for him to resign immediately.”
Mr. Saikawa had long been fighting an uphill battle: The company’s profits dropped 94 percent in the last quarter, its alliance with Renault is coming apart at the seams, and many Nissan employees have lost faith in Mr. Saikawa’s ability to lead the company out of its most difficult crisis in years. News of Mr. Saikawa’s departure came after Nissan’s board received a briefing on the results of a nearly yearlong investigation into the company’s governance. The inquiry was prompted by Japanese prosecutors’ arrest of Mr. Ghosn on suspicion of financial misconduct, including underreporting his compensation by tens of millions of dollars. He denies any wrongdoing.
In June, shareholders approved a slate of governance reforms, marshaled through by Mr. Saikawa, intended to address what it described as an overconcentration of power in the hands of Mr. Ghosn, who presided over the company’s alliance with Renault and Mitsubishi.
Since Mr. Ghosn’s November arrest, Nissan’s internal inquiry had expanded to include other aspects of the company’s business, including the compensation of Mr. Saikawa and other top executives.
Speculation that Mr. Saikawa would resign had swirled since Thursday’s public admission that he and other executives had received unearned compensation as a result of what he described as an error by the company. He was once a loyal deputy to Mr. Ghosn who has been withering in his criticism of his former boss since the arrest.
The allegation was first disclosed in June, when Greg Kelly, a former Nissan senior executive, accused Mr. Saikawa of using a stock-based compensation plan to increase his pay. Mr. Kelly has been charged with conspiring to underreport Mr. Ghosn’s compensation, an allegation he denies.
In a summary of Nissan’s internal investigation shared with reporters Monday, the company said that the overpayments to Mr. Saikawa totaled more than 47 million yen, or about $440,000, after taxes. Mr. Ghosn and Mr. Kelly, as well as an additional six directors and executives, also benefited from the stock scheme, which it said had been manipulated by Mr. Kelly on behalf of Mr. Ghosn without the knowledge of the other beneficiaries.
In his comments Monday, Mr. Saikawa admitted that he had asked Mr. Kelly to find a way to increase his compensation, but said he had not realized the executive would do something “against the rules.”
A representative for Mr. Ghosn said the accusations that he was involved in the stock-based scheme were “a shameful attempt from Nissan to use Mr. Ghosn as a scapegoat,” adding that the company’s treatment of Mr. Saikawa constituted a “double standard.”
A representative for Mr. Kelly did not immediately respond to a request for comment.
Even before the revelation of the scheme, Mr. Saikawa had been fighting an uphill battle to keep his position at Nissan in the face of deteriorating profits and a difficult relationship with Renault. Global vehicle sales were down 6 percent in the last quarter, insiders said morale at Nissan has plummeted and top talent has left the company as employees lost faith in Mr. Saikawa’s ability to lead.
Renault had no immediate response to Nissan’s news.Renault had no immediate response to Nissan’s news.
Whether Mr. Saikawa’s resignation opens the way for a new era between Renault and Nissan remains to be seen. Relations have been fraught since Mr. Ghosn’s arrest, and tensions over the future of the alliance flared regularly, despite efforts by Renault’s chief executive, Jean-Dominique Senard, to cultivate a personal relationship with Mr. Saikawa, with whom he spoke by telephone nearly every day. Whether Mr. Saikawa’s resignation begins a new era between Renault and Nissan remains to be seen. Relations have been fraught since Mr. Ghosn’s arrest, and tensions over the future of the alliance flared regularly, despite efforts by Renault’s chief executive, Jean-Dominique Senard, to cultivate a personal relationship with Mr. Saikawa, with whom he said he spoke nearly every day by phone.
A top issue facing Mr. Saikawa’s successor will be how to strengthen the alliance as the global auto industry rapidly consolidates, with giants like BMW and Daimler cooperating on crucial innovations like autonomous driving technology. Analysts say that only by combining forces can Nissan and Renault afford the huge technology investments necessary to avoid obsolescence.A top issue facing Mr. Saikawa’s successor will be how to strengthen the alliance as the global auto industry rapidly consolidates, with giants like BMW and Daimler cooperating on crucial innovations like autonomous driving technology. Analysts say that only by combining forces can Nissan and Renault afford the huge technology investments necessary to avoid obsolescence.
Renault and Nissan have acknowledged they still need one another to survive and thrive. But Mr. Senard told Renault shareholders recently that “a tense climate” reigned between his company and Nissan. Renault and Nissan have acknowledged they still need each other to survive and thrive. But Mr. Senard told Renault shareholders recently that “a tense climate” reigned between his company and Nissan.
On his way out on Monday, Mr. Saikawa could not resist taking one last swing at Mr. Ghosn and Mr. Kelly, whom he blamed for his fate.
“They should feel bad about this,” he said. “But they haven’t expressed any apology for creating the situation at Nissan. I want Mr. Ghosn and Mr. Kelly to feel bad about this situation that they have created.”