Carlos Ghosn, as chairman of Nissan Motor Co., gave instructions to have his remuneration understated in the company's annual securities reports apparently because he hated being criticized for receiving such a huge income, The Yomiuri Shimbun has learned.
Ghosn has been suspected of playing a leading role in understating his remuneration on Nissan's securities reports. He wanted to make it appear externally as though his remuneration was lower than it really was, according to sources.
An executive at an automaker recalled the shock he received in 2010 when Ghosn's salary came into the spotlight.
"Of course, I thought he probably was earning more than 100 million yen [about 885,000 dollars], but he was actually receiving almost 900 million yen," the executive said. "That figure stunned me."
Listed companies have been required to disclose the remuneration paid to their executives since the business period ending March 2010. In line with this system, the remuneration paid to Ghosn and five other Nissan executives was revealed at a general shareholders meeting on June 23, 2010.
Although the total amount paid to Nissan's executives had dropped almost 900 million yen from the previous fiscal year to about 1.7 billion yen, Ghosn earned 891 million yen. He was the highest earner among executives of listed companies that disclosed their figures.
Ghosn remained near the top among top earners from the following year. "Every year, considerable attention was focused on whether he would break through the 1 billion yen mark," said a source at one company.
Ghosn was instrumental in pressing ahead with a major restructuring that resulted in financially troubled Nissan making a strong rebound in business performance. While some observers felt "even remuneration of 1 billion yen was low" for Ghosn's achievements, he also was dogged by criticism of his lofty income.
At the shareholders meeting in 2007, before the remuneration disclosure system was introduced, Ghosn received stinging criticism from stockholders because in the business year ending in March that year, Nissan had posted its first profit decline in its consolidated accounts since he became the automaker's president. When it was suggested the 2.5 billion yen paid to nine executives including Ghosn was "too much," he stressed that figure "was in line with the standards of global companies."
At the June 2014 shareholders meeting, a speaker said Ghosn's income was "high for a Japanese company." Ghosn insisted Nissan was a global company and that his remuneration was not high when compared with that of Nissan's global rivals.
"I thought he made difficult demands regarding money, but I never imagined he would resort to such wrongdoing," a Nissan executive told The Yomiuri Shimbun.
According to sources, Ghosn instructed close aides to keep his own stated remuneration on securities reports at about 1 billion yen from around 2010, when the disclosure system started.
This instruction apparently was conveyed to executive officers in charge of compiling securities reports via Greg Kelly, 62, a representative director at Nissan and Ghosn's closest aide.
Since the business year ending in March 2011, Ghosn's stated remuneration on the reports hovered around 1 billion yen. In the latest report for the business period ending March 2018, his remuneration was listed as 735 million yen, a drop of 33 percent from the previous fiscal year.
However, there is suspicion Ghosn's stated remuneration over these eight years could actually be a total of about 8 billion yen less than what he actually received.
"It's obvious shareholders would criticize him for earning an 'exorbitant' income if the true figure was disclosed on the reports," a senior prosecutor said. "Consequently, it seems he desperately wanted to keep the reported income at about 1 billion yen."
Meanwhile, the Tokyo District Court decided Wednesday that Ghosn and Kelly would be detained for 10 days until Nov. 30.
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