Hiroto Saikawa, CEO of Nissan, has resigned his post days after it was revealed he had been overcompensated as part of the company's stock appreciation rights scheme.
An investigation conducted by the audit committee tasked with finding out and detailing the crimes and misdemeanours of former CEO Carlos Ghosn and former board member Greg Kelly has unearthed evidence of an improper payment to Saikawa back in 2013, when he was an executive vice president.
According to the committee's report, Saikawa asked "Kelly and others to explore ways to increase his executive compensation".
Kelly recalculated the amount due to Saikawa from his share appreciation rights, even though they were exercised. Kelly falsified documents to indicate the rights were used a week later than in reality. The resulting share price difference meant Saikawa earned an extra ¥47 million ($650,000).
The outgoing CEO admitted he had been overpaid, and pledged to repay the amount. Saikawa stated he didn't intend to break company rules and did nothing illegal, but conceded it was an error to appoint a team led by Kelly to handle his share-based compensation.
Yasuhiro Yamauchi, the company's other representative director and chief operating officer, will assume the role of acting CEO.
The automaker says it will "accelerate its efforts to select a successor for the CEO position", and aims to name Saikawa's permanent successor by the end of October.
Masakazu Toyoda, head of Nissan's nomination committee, told Automotive News the company has "a very diverse list" of candidates for the position. Of the ten people on the shortlist one is a woman, another is not Japanese, and one has experience at Renault, Nissan's alliance partner.
Whoever is appointed, it will provide the troubled automaker its best chance of a clean break from the Carlos Ghosn era.
Saikawa was appointed as Nissan's co-CEO in 2016 as part of a transition plan which would see Ghosn slowly step back from day-to-day affairs at the automaker, although he remained at the helm of both Renault and the Renault-Nissan Alliance.
Ghosn's protege became sole CEO in 2017, while Ghosn retained the title of president.
During Ghosn's reign as the head of Nissan and Renault, Saikawa was largely seen as a loyal deputy. That changed in November 2018 when Ghosn was arrested for underreporting his income and inappropriately using company funds.
In a stunning press conference on the day of Ghosn's arrest, Saikawa talked down the former CEO's impact in turning Nissan around in the early 2000s, and spoke at length about "the negative aspects of the Mr Ghosn's regime", including the concentration of too much power in one person's hands.
At the beginning of 2019, Saikawa managed to implement a series of governance reforms. With his stated main goal complete, Saikawa said he was preparing to step down and hand over to a new generation. Revelations about improper payments to Saikawa have accelerated the timetable significantly.
Saikawa's time at the helm has been eventful, to say the least. Beyond Ghosn's arrest, in late 2017 Nissan temporarily halted car production and recalled all the vehicles — roughly 1.2 million — it had sold in Japan between October 2014 and September 2017.
This was due to some final inspection checks being "carried out by technicians not properly authorised to perform those duties".
According to reports Renault, Nissan's Alliance partner, had also been keen on a merger with the Japanese automaker. With Yokohama cool on the idea, Renault then pursued a merger of equals of Fiat Chrysler, which broke down to due to the French government's insistence that Nissan formally approval the deal.