Carlos Ghosn could be excused for indulging in a little malicious glee as Nissan Motor CEO Hiroto Saikawa stumbles through his own compensation woes.
Since Ghosn's dramatic downfall last November, arrested for allegedly underreporting his income, the former chief of the Nissan-Renault-Mitsubishi alliance has been kept largely out of view with long spells in police detention.
Saikawa, who helped engineer Ghosn's ouster, stayed busy apologizing profusely and frequently for the scandal still rocking the automaker.
But now Saikawa faces his own accusations. In-house investigators found that he improperly received the equivalent of $443,000 as part of a performance-based bonus scheme. Saikawa acknowledged he had received the money but denied wrongdoing and pointed the finger at colleagues, including Ghosn.
Saikawa's days of running Nissan are numbered (Nikkei reports he is planning to step down). Just as under Ghosn, investors might have been inclined to overlook compensation shenanigans if Japan's carmaking giant were thriving. But Saikawa has neither buttressing the credibility of the carmaking giant nor steering it toward a return to profits.
Nissan's troubles, though, tell a bigger story of lost opportunities nearly seven years into Shinzo Abe's revival regime. With Saikawa now embroiled in his own pay controversy, it is worth reviewing what Nissan's mess says about the sorry state of Japanese corporate governance.
In December 2012, Abe rode into the prime minister's office on an ambitious plan to reanimate Japan Inc.'s competitive spirit. His moves to open the monetary and fiscal floodgates worked well enough. Fresh stimulus, and a resulting drop in the yen, sparked the longest expansion since the 1980s.
The most important phase of Japan's return to global greatness -- bold structural upgrades -- has barely left first gear. Now one of Abe's biggest perceived reform wins is undergoing a serious revision.
Starting in 2014, Abe's team took aim at Japan Inc.'s bloat and insularity, first with a U.K.-like stewardship code, then with guidelines aimed at giving shareholders more say in company decisions. Last year, Tokyo asked executives to disclose more details of cross-shareholding relationships with friendly companies.
Yet progress in raising Japan's corporate standards has been slow and uneven. The only real bull market Tokyo has seen over the last 24 months is in corporate misdeeds.
For example, in 2018 it emerged that KYB, maker of earthquake shock absorbers used in the construction of Japan's tallest structure, Tokyo Skytree, had falsified safety data. The auto sector had more than its fair share of controversy as Mazda Motor, Subaru, Suzuki Motor, Yamaha Motor and Nissan faced vehicle-inspection troubles.
The Nissan saga reminds investors that, for all Abe's perceived heavy lifting, the nation's corporate chieftains still answer to no one. The drip-drip-drip of bad news from Nissan and elsewhere "shows that Japan Inc. still has teeth," says Jeff Kingston, director of Asian studies at Temple University's Japan campus. The reason: Abe's reforms lack any teeth.
Too much of what Abe's team rolled out since 2014 falls under the banners of "voluntary" or "best-practice guidelines" that lack true accountability. Policy vagueness has been a friend to companies avoiding change.
Japan Inc. is edging in the right direction. Companies have reduced the number of cross-shareholdings by 12% in five years. Such arrangements reduce transparency, shield companies from competition and takeover attempts and are a recipe for mediocrity.
For all the hype about Abe's reforms, Japan slipped three places in the last two years in the Asian Corporate Governance Association's annual rankings. It is now seventh out of 12, trailing Malaysia, Taiwan and Thailand.
This slide comes as the global trade war hits Japan Inc. hard. Corporate profits fell 12% in the second quarter from a year earlier. Listed companies, meanwhile, are sitting on a record $4.8 trillion of cash, according to Bloomberg data.
Abe bet that a weaker yen and better corporate practices would unleash a virtuous cycle of higher income, greater consumption and increased innovation. It turns out that all the stimulus Tokyo churned into the economy these last several years did more to protect change-adverse chief executives than catalyze major change.
There are steps Abe could take to prod CEOs to deploy this embarrassment of riches. Tokyo could offer tax incentives to reward companies that share profits with workers. It could do the same with companies that take risks betting on promising new industries.
Abe's team could name and shame companies acting as if it is 1989, not 2019. It could increase enforcement actions and levy fines.
Nissan's mess is a reminder that fossilized practices die hard. So does Tokyo's long tradition of corporate deference. Something has to give. Tightening the screws on Japan Inc. could be just the thing to give Abenomics a badly-needed reboot.
William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."