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Nissan's Ghosn crisis

Ghosn's undisclosed pay said to reach $71m over 8 years

Former Nissan chief allegedly hid full remuneration longer than initially reported

Ousted Nissan Chairman Carlos Ghosn was concerned about criticism from the French government over his pay. (Photo by Keiichiro Asahara)

TOKYO -- Just-ousted Nissan Motor Chairman Carlos Ghosn underreported his cash compensation by about 8 billion yen ($71 million) over the eight years through March, sources familiar with the matter told Nikkei on Thursday, revealing that he may have hidden his full pay longer than previously thought.

Ghosn was arrested Monday by Tokyo prosecutors on suspicion of understating his pay in securities filings by about 5 billion yen for the five years through March 2015 in violation of Japan's Financial Instruments and Exchange Act.

He was concerned about criticism of his pay by the French government, a major shareholder in Renault, sources said. He slashed his compensation when Japan began requiring companies in fiscal 2009 to list in securities filings the names and pay of all directors making 100 million yen or more. He is accused of actually receiving 1 billion yen more a year in unreported income.

Ghosn received between 700 million yen and 1.1 billion yen a year since fiscal 2009, for a total of 7.89 billion yen over the eight years through March, according to Nissan's filings.

In June 2008, Nissan decided to cap total cash compensation of directors at 2.99 billion yen a year. The figure excluding outside directors came to 2.5 billion yen that fiscal year but dropped to 1.6 billion yen in fiscal 2009, the year that the new reporting rules took effect. It has since hovered between 1.4 billion yen and 1.8 billion yen. Depending on how much Ghosn was actually paid, Nissan may also have to correct total inside director cash compensation in its filings, which came to 13.2 billion yen in the last eight fiscal years.

In addition to the allegedly unreported 8 billion yen in cash, Ghosn is believed to have omitted the 4 billion yen in stock appreciation rights received in the four years through March from securities filings. Nissan is cooperating with prosecutors as they investigate whether this also ran afoul of the Financial Instruments and Exchange Act.

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