TOKYO -- Nissan Motor CEO Hiroto Saikawa is to step down on Sept.16, after an intense board meeting on Monday in which other members debated and decided his fate.
Nikkei learned on Sunday that Saikawa had already signaled his intention to resign amid a scandal over improperly inflated pay, but it appears he envisioned a more drawn-out transition, giving him time to turn around the struggling automaker over the next two to three years.
The board had other ideas.
Monday afternoon's meeting, held at Nissan's headquarters in Yokohama, was prompted by an internal probe into management misconduct. A little over three hours into the proceedings, one member said, "Mr. Saikawa, please excuse us." The CEO left the room as requested.
Chief Operating Officer Yasuhiro Yamauchi -- the only board member selected from the automaker itself, excluding Saikawa -- started the deliberations by saying, "Nissan cannot change unless we make a big decision now."
Since former Chairman Carlos Ghosn was arrested last fall over allegations of financial misconduct, Nissan's reputation has been dragged through the mud. With the media, the public and even employees now questioning the company's moral compass, Yamauchi argued a change at the top was crucial for restoring the automaker's image.
A foreign director agreed, saying that trust in the board and the company's governance would collapse unless a decision was made right away.
Nissan's French partner and largest shareholder, Renault, was also party to the discussion. Chairman Jean-Dominique Senard and CEO Thierry Bollore were on a teleconference screen at the front of the room.
When board Chairman Yasushi Kimura asked Senard for his opinion, the Renault executive said the matter is bigger than one individual. The issue is about Nissan's governance and the image of the new board, he continued, backing the view that Saikawa should step down swiftly.
The controversy over Saikawa's compensation tipped the scales against him. The CEO received an unearned bonus of 47 million yen ($437,000) through a tweak to the terms of his stock appreciation rights. The probe released on Monday confirmed doubts that had been raised back in June, declaring the pay inappropriate.
Saikawa has admitted to receiving the money but insisted he did not direct the manipulation. The probe found nothing to indicate otherwise. Nevertheless, Kimura said, "There is a serious problem in the governance."
Saikawa was already on thin ice, having been Ghosn's right-hand man but failed to spot his boss's alleged wrongdoing for years. Now, under fire for his own scandal, outside directors felt the chief's time was up.
One person did object to an immediate resignation, however.
"Can't we take more time to choose the successor?" asked Masakazu Toyoda, a Nissan executive who chairs the nominating committee that will have to find Saikawa's replacement. He said the committee needed until March 2020.
"That is too long," one board member responded. "Can't we choose the next CEO in a month?"
After a long silence, Toyoda offered, "We can choose the person within two months, by the end of October."
The board's original idea was to have Saikawa resign the same day, replacing him with an interim chief. In the interest of a smooth changeover, the date was set for Sept. 16 instead -- a week later.
At around 8 p.m., after a roughly two-hour wait, Saikawa was called back in. Meanwhile, more than 100 reporters were gathering downstairs, as the automaker had called an 8 o'clock news conference without specifying the topic.
"Mr. Saikawa, the board today asks you to step down as the CEO," Kimura said in the meeting room.
"I was to resign after everything was finished, including Nissan's performance recovery and governance improvements," Saikawa responded. "I wasn't expecting to be asked to step down today."