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Nissan-Renault alliance

Nissan CEO Saikawa intends to step down amid pay scandal

65-year-old executive wants to 'pass the baton as soon as possible'

Nissan President and CEO Hiroto Saikawa speaks to reporters in Tokyo on Sept. 9 following his decision to resign from the automaker. (Photo by Kai Fujii)

TOKYO -- Nissan Motor CEO Hiroto Saikawa has decided to step down days after admitting he received improperly inflated compensation, Nikkei learned on Sunday.

Saikawa has told several Nissan executives of his intent. The exact date of his resignation and his replacement are yet to be decided.

Following the Nikkei report, Saikawa told reporters on Monday morning, "I want to pass the baton to the next generation as soon as possible." The Nissan board, he said, will make "thorough preparations" for the transition.

The Japanese automaker was close to wrapping up its internal investigation into similar allegations against former Chairman Carlos Ghosn when it was revealed that Saikawa himself had issues over improper remuneration. Facing mounting criticism, Saikawa -- who has struggled to boost Nissan's performance -- decided it was time to step down.

Asked by reporters on Monday about allegations that he inappropriately received extra compensation by tweaking the terms of a performance-based bonus, Saikawa repeated his denial of any wrongdoing, saying, "I never ordered the company to break the rules."

Nissan's nomination committee, which is comprised mainly of outside directors and includes Renault Chairman Jean-Dominique Senard, began the search for Saikawa's replacement in July, sources say.

Nissan will hold a board meeting on Monday, where they will discuss the issue of Saiwaka's remuneration as well as review a list of candidates for CEO and confirm the selection process.

Saikawa became President and the CEO in April 2017, under then-Chairman Ghosn. Since the arrest of Ghosn in November 2018 and his ousting as chairman, Saikawa has been fiercely criticizing his former boss for understating his compensation and using the automaker's funds for private purposes.

However many inside and outside the company have questioned Saikawa continuing his role as CEO, as he counts as one of the key executives who supported the Ghosn regime for years, being a director since 2005 and stepping up to a representative director in 2011.

Saikawa had the lowest support among the 11 directors appointed at the annual shareholders meeting in June, gaining only 78% approval. Some investors including Nippon Life Insurance voted against retaining Saikawa.

Criticism only intensified when it was revealed that Saikawa allegedly received compensation improperly raised under the stock appreciation rights scheme.

The internal probe into Ghosn's misconduct and the company's governance concluded last week. The results will be reported to Monday's board meeting.

The board will also likely discuss whether to punish Saikawa over his alleged improper compensation. The CEO denies his own involvement to inflate his pay. Several other executives seem to be involved in the similar compensation issue, in a sign of the lack of the corporate governance within the Japanese automaker.

Regarding succession, Saikawa commented in July that he hopes "the appointment committee will soon start the discussion and make a framework for the next-generation management." Saikawa also added that he "fulfilled one of the milestones of responsibility" by inaugurating an independent nomination committee.

Meanwhile, Nissan's performance continues to aggravate. The carmaker announced in July a 99% drop in operating profit in the April to June quarter, versus the previous year, leading to cut its payroll by 12,500 by March 2023, accounting for 10% of the group's employees.

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