Nissan CEO Ousted as a Result of Pay Scandal
By Stephanie Gills
International Business Writer
According to Reuters, Nissan Motor Company Chief Executive, Hiroto Saikawa, considers his resignation as “passing the baton to the next generation” despite his argument of being improperly compensated.
Sources say Saikawa desired to resign from his position at Nissan and is not “clinging to his chair.”
By unanimous vote, Nissan’s CEO is due to step down on September 16 and will be replaced by Chief Operating Officer, Yasuhiro Yamauchi, until the board finds a permanent CEO, reports the Wall Street Journal.
Discussions about Saikawa’s departure arose after June’s annual shareholder meeting, where they discovered the company’s accruing losses.
After a company investigation uncovered Saikawa received illegitimate stock-based compensation of approximately $439,000 in 2013, Nissan’s board put Saikawa’s removal to a vote. According to Nissan director, Yasushi Kimura, the board “believed immediate action was appropriate.”
At a news conference, Saikawa stated that he was leaving earlier than planned and had no idea of improper stock-based compensation but would return the excess pay. Debates erupted over Saikawa’s immediate departure and some board members wished for him to remain in his position until a new CEO is found. Nonetheless, Nissan hopes to find a replacement successor by the end of October.
Nissan Motor Co. suffers from declining sales and profit. In the April – July quarter, Nissan’s profit dropped 98.5 percent. Amidst this, trouble with the company increases as debates over Renault’s shareholder structure continues. Nissan plans to cut 12,500 jobs or nine percent percent of its global workforce in July.
Just last November Nissan’s president, Carlos Ghosn, was imprisoned for financial crimes. He now awaits trial in Tokyo but remains consistent in his argument of innocence.
As Ghosn’s replacement, Saikawa is criticized of continuing Ghosn’s “abuses of power.” Saikawa is accused for contributing to Nissan’s dismissal business performance.
Saikawa joined Nissan in 1977 after graduating from the University of Tokyo. He was known for having a spock-like personality; highly intelligent and very calm. He helped mitigate the Renault share in order to cut some of Nissan’s costs. He played a key role in Nissan’s advancement, yet always preferred to be behind the scenes.
Yasuhiro Yamachi, Saikawa’s temporary replacement, has worked for the company since 1981. He also has experience in business with Renault.
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