An undeclared retirement scheme allegedly used to hide some of his pay

When Carlos Ghosn was arrested a few weeks ago, he was accused by Nissan of under-reporting his income in official stock exchange filings. Now details are beginning to emerge of just how he managed it.

Various reports have suggested Ghosn hid between ¥5 and ¥9.5 billion ($60 to $110 million), with Bloomberg estimating a figure around $95 million.

According to sources who've spoken with the financial news service, prosecutors are probing his retirement benefits, which weren't declared to the authorities.

Bloomberg understands Ghosn's defence is that these retirement benefits were variable in nature, and therefore did not need to be declared.

It's said Ghosn tried to hide the true size of his pay after Japan introduced rules in 2010 to publicly disclose executive pay, and he was revealed to be the country's highest paid CEO.

Figures from Reuters indicate Ghosn was paid around $23 million last year, with $11.4 million coming from Renault, where he is CEO, and $8.8 million from Nissan and about $2.7 million from Mitsubishi.

His income is within the same ballpark as his contemporaries at European and American automakers, but significantly more than CEOs of other Asian car companies.

Ghosn was given a large degree of control and autonomy, a remnant of his early years as Nissan CEO. He was parachuted in during 1999, with the automaker facing heavy debts, big losses, and a range of vehicles charitably described as bloated and boring.

After rescuing the company from its near-death experience, he was feted as a hero, and given extraordinary control, including the ability to set his own pay and that of other directors.

It wasn't until 2017, in the wake of its massive recall scandal, Nissan hired its first independent directors: Masakazu Toyoda, a former top government bureaucrat, and Keiko Ihara, a former race car driver.