Nissan CEO Saikawa forced to resign following investigation

Nissan CEO Saikawa forced to resign following investigation

10 September 2019

Nissan's embattled CEO Hiroto Saikawa will step down this month following allegations over his own financial misconduct.

The announcement was made by the carmaker's chairman, Yasushi Kimura, who also said that COO Yasuhiro Yamauchi would serve as acting CEO while the company seeks a full-time replacement. The news brings down the curtain on the pantomime that has been played out between Saikawa and Carlos Ghosn since late last year.

On the cards

Saikawa had recently indicated a willingness to resign, once the company had a successor. However, the company's board has outlined the findings of an internal investigation into the misconduct that led to the arrest of former chairman Ghosn and left Japan's second-largest automaker beset in turmoil. The investigation's scope has gradually expanded over time to include a probe of Saikawa's use of an executive incentive program.

This has led the company to a decision to remove its CEO as soon as possible. ′We felt immediate action would be appropriate,' said Kimura, who was appointed the chairman of the board in June. ′We are in a serious stage of searching for successors.'

Problems unsolved

Saikawa, who appeared at the end of the hastily arranged news conference, said the confusion of the investigation and the outcry over his inappropriate use of a stock-linked compensation scheme added urgency to his intention to step down. He had said in June that he wanted to accelerate the succession process so he could pass the baton to new leadership.

He also highlighted the long list of unfinished business he felt responsible for, including the rebuilding of profits, a shoring up of falling sales and a restoration of frayed relations with Renault.

′We see a lot of repercussions from what we did in the past,' he said. ′I couldn't finish everything, and I express my apologies for stepping down while things are yet to be done.'

Saikawa had come under increasing pressure to step down amid fresh revelations he exercised a stock-linked compensation scheme to boost his payout by nearly half-a-million dollars. The internal audit concluded that Saikawa's actions weren't illegal, partly because investigators were convinced he had no intention of deliberately gaming the system.

Saikawa said he would return the excess proceeds to Nissan.

Ghosn troubles

The CEO is believed to be the whistleblower in the Carlos Ghosn scandal that has engulfed the company over the last months. The Brazilian may have been investigating a full takeover of the Japanese carmaker by its alliance partner Renault, something Saikawa was against.

Since Ghosn’s arrest and indictment, however, Nissan has plunged into upheaval.

The company saw several executive exits and departures to other companies and saw its operating profit plunge 99% in the first quarter, as ties with Renault became ever more strained, especially following the collapse of a potential merger with Fiat Chrysler Automobiles.