The amount of executive remuneration former Nissan Motor Co. Chairman Carlos Ghosn received from the automaker that was not stated in the company’s securities reports totaled about ¥9.5 billion over nine years from the business year ending March 2010 to that ending March 2018, according to sources.
His executive remuneration, including the unstated amount of pay, has steadily increased almost every year since the business year ending March 2009, the sources said. In the business year ending March 2010, a system requiring companies to disclose their executives’ remuneration was introduced.
The detailed amount of Ghosn’s remuneration was recorded in materials, including memorandums created by former Nissan Representative Director Greg Kelly, 62, and other executives at the instruction of Ghosn, according to the sources.
Similar findings have been discovered by the special investigation squad of the Tokyo District Public Prosecutors Office, which believes that Ghosn, 64, decided the detailed amount of his remuneration on his own, but intentionally had it understated in the securities reports.
According to sources, Ghosn decided to receive part of his compensation after stepping down as an executive, following the introduction of the disclosure system of executives’ remuneration in the business year ending March 2010, to avoid criticism against his high pay.
While he did not state the amount of pay he was to receive after he retires, he created memorandums and other documents each year to ensure that he would later receive payment.
The Yomiuri Shimbun has learned that Ghosn’s pay was about ¥1.8 billion in the business year ending March 2009 before the disclosure system was introduced.
In the business year ending March 2010 when the system started, he reduced his remuneration to about ¥1.4 billion but had it stated as ¥891 million in the securities report, according to the sources, as Nissan was in the red in the business year ending March 2009, mainly due to the impact of the collapse of U.S. investment bank Lehman Brothers in the autumn of 2008.
From the business year ending March 2010, Nissan’s performance recovered and Ghosn’s remuneration increased to about ¥1.8 billion in the business year ending March 2011, according to sources. Since then, the amount allegedly had grown by about ¥100 million annually, increasing to about ¥2.4 billion in the business year ending March 2017.
In the business year ending March 2018, Ghosn announced that his pay was ¥735 million, down 33 percent from a year earlier, because he withdrew from the posts of president and chief executive officer of Nissan. However, his executive remuneration was allegedly ¥2.4 billion — the same as that of the previous year — with the unstated portion swelling to more than ¥1.6 billion.
Ghosn and Kelly have been arrested on suspicion of violating the Financial Instruments and Exchange Law by allegedly conspiring to understate Ghosn’s executive remuneration in Nissan’s securities reports by about ¥5 billion from the business year ending March 2011 to that ending March 2015.
During the interrogation by the prosecutors, they both denied the allegations, saying, as it had yet to be determined whether Ghosn would receive part of the remuneration after he steps down, he was not obliged to state the deferred payment on the securities reports.