Mr. Hiroto Saikawa, the chief executive of Nissan, said that he received overcompensation than he deserved. Though he denied any prior knowledge about the improper overcompensation. In an interview with local news media, the chief executive admitted that during investigation within Nissan, he and other executives had received more than the equity-linked compensation. According to NHK, the official Japanese broadcaster, Mr. Saikawa had received an excess compensation of about $440,000, which he blamed on the company’s mistakes. He also apologized for the inconvenience caused. Further, he showed intention to return excess amount from the original registration to the company.
The acknowledgment may be in line to draw comparisons for the uproar over the compensation paid to Carlos Ghosn. Mr. Ghosn was the former boss of Nissan and the ex-leader of the vast car-making alliance between Nissan, Mitsubishi Motors of Japan, and Renault of France. The Japanese prosecutors charged Mr. Ghosn for understating his compensation, an allegation which he has denied. Nissan’s spokeswoman, Azusa Momose said the investigation results are expected to be submitted to board of directors of Nissan on Monday. Later, she declined. The disclosure of Mr. Saikawa has brought further gloom to a car manufacturer that has been stunned by scandals and broader industry issues. The profits almost evaporated, and sales fell. The company is in process to lay off 12,500 employees worldwide. This has found at odd itself along with the French car manufacturer Renault, its alliance partner.
The profit of the company declined by 94% during the period from April to June as compared to last year. The company previously warned about its net profit that would hit “rock bottom” this year. It would drop to nearly 47% at the end of the fiscal year in March. The announcement followed to fall almost 45% in profit last year. Global demand for automobiles has slowed, especially in Nissan’s largest Europe and North America markets due to decreasing demand for cars. The company problems have made it difficult to attract American customers who favor sport utility vehicles and trucks because of the stagnant product lineup. At a press conference in July, Mr. Saikawa veiled that he may resign within a year. He also pointed out that he had asked the newly formed Nominating Committee to start looking for his replacement.